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In this qualitative study based on 95 interviews with Chinese subordinates and their German supervisors, we inductively develop a model which advances theoretical understanding by showing how inter-cultural trust development in hierarchical relationships is the result of six distinct elements: the subordinate trustor’s cultural profile (cosmopolitans, hybrids, culturally bounds), the psychological mechanisms operating within the trustor (role expectations and cultural accommodation), and contextual moderators (e.g., country context, time spent in foreign culture, and third-party influencers), which together influence the trust forms (e.g., presumptive trust, relational trust) and trust dynamics (e.g., trust breakdown and repair) within relationship phases over time (initial contact, trust continuation, trust disillusionment, separation, and acculturation). Our findings challenge the assumption that cultural differences result in low levels of initial trust and highlight the strong role the subordinate’s cultural profile can have on the dynamics and trajectory of trust in hierarchical relationships. Our model highlights that inter-cultural trust development operates as a variform universal, following the combined universalistic-particularistic paradigm in cross-cultural management, with both culturally generalizable etic dynamics, as well as culturally specific etic manifestations.

This paper argues for the inclusion of (cultural and institutional) context into International Business studies. It is based on own research experiences, findings, reflections and conclusions. Part...

Expatriate host country language proficiency is predominately assumed to have a negative linear relationship with expatriate social categorization – as outgroup members – by host country national (HCN) employees in foreign subsidiaries. Departing from this assumption, we use social identity theory (SIT) and SIT-based sociolinguistics to hypothesize that expatriate host country language proficiency, due to identity threat, has a curvilinear U-shaped relationship with HCNs’ expatriate outgroup categorization: at first, outgroup categorization decreases with increasing expatriates’ language proficiency, but, from a certain point onwards, it increases because “too good” language proficiency violates salient intergroup boundaries between HCNs and expatriates. Due to their key roles in social categorization, we also examine whether HCN allocentrism and uncertainty avoidance moderate the proposed curvilinear relationship. Results from data collected from 1166 HCN employees in 956 foreign subsidiaries in Japan provide support for the main curvilinear relationship and the moderating curvilinear relationship of uncertainty avoidance. Our results suggest that the language-proficient expatriate social categorization relationship is more complex than previous international business research has evoked. Our study contributes to the international business literature by casting doubt on the widely held assumption that expatriate adaptation towards the host country always carries beneficial effects. Our study cautions, in particular, against the common assumption that higher proficiency in the host country language will automatically lead to better relationships with HCNs in foreign subsidiaries.

Following the globalization of higher management education and the view of academics as autonomous professionals, academic careers in business schools are deemed to typify the boundaryless careers ...

Scholars performing intercultural survey research encounter a number of challenges that reach beyond those typical for domestic research. This chapter explores the specific issues that arise during intercultural survey research, differentiating between the key stages of the research process: determining the study population and data access, survey development, survey and data collection process, data analysis, and publication of results. For each stage, we review the relevant literature, offer illustrations that draw on examples from our own research, and provide suggestions for improving the quality of intercultural survey research.

Multinational teams, which include members from different countries, are an important tool to manage the complex operations of today’s multinational corporations. A distinguishing feature of these teams is the diversity of mother tongues their members are speaking. Language diversity profoundly shapes team communication and consequently affects multinational team processes and outcomes. This chapter reviews recent studies aiming to capture the intricate influence of language diversity on multinational teamwork and offers suggestions for the future development of this vibrant research area. We outline the current state of the field by focusing on five recurring themes: language-induced power distortions, issues regarding social identity formation, emotional conflict, obstacles to trust building, and hurdles to knowledge sharing. Building on this overview, we encourage scholars to study linguistic influences on other multinational team processes, to investigate language challenges for virtual teams, and to explore the impact of language diversity on different dimensions of team effectiveness.

Based on semi-structured interviews in 15 multinational teams (MNTs) from the automotive industry, this exploratory study investigates the relationship between language barriers and mental model fo...

Based on 90 interviews with leaders and members of 15 multinational teams, this study explores the influence of language differences on power dynamics in multinational teams. First, we establish hierarchical position and professional expertise as general sources of power in teamwork. Subsequently, we demonstrate how different language policies, the degree of formality in language structures, and language proficiency disparity moderate team members’ capacity to capitalize on these power sources. Our study elucidates the complexity of linguistic influences on power dynamics in teamwork, reveals previously neglected differences in language structures, emphasizes the importance of relative proficiency and carries significant practical implications.

This study investigates the impact of language barriers on multilingual virtual teams members’ choice between different communication media in their inner-team interactions. Through interviewing team leaders and members in both mono- and multilingual virtual teams, we discover discrepancies in media choice and media performance between these two settings and identify foreign language-induced cognitive load as a key reason for these divergences. Our study advances research on communication and knowledge exchange in multilingual virtual collaboration by showing how language barriers alter the process of converging different viewpoints through team interaction, by suggesting language-related modifications to the seminal media synchronicity theory, and by demonstrating the benefits of new media in multilingual settings. It also broadens the disciplinary scope of language research in international business by introducing theories from communication studies and cognitive research. In practical terms, it highlights the benefits of redundant communication, the need for an adequate media infrastructure in multinational corporations and the importance of motivating team members to use new media.

This qualitative study investigates how language diversity in multinational teams affects communication, which, in turn, influences knowledge processing. We show that evident language barriers (lack of lexical and syntactical proficiency) reduce participation in team communication, which impedes both basic and sophisticated knowledge processing activities. We also demonstrate that hidden language barriers (pragmatic and prosodic transfer between mother tongues and working language) impair sensemaking in the team, which disrupts sophisticated knowledge processing activities. By highlighting the relevance of hidden barriers, our study encourages a more comprehensive conceptualization of language barriers and uncovers the micro-foundations of knowledge processing in multilingual teams. Contrasting evident and hidden barriers, our study juxtaposes the instrumental and the cultural perspective on language. By distinguishing basic and sophisticated knowledge processing activities, we weigh the information processing against the socio-cognitive perspective on knowledge. We integrate these divergent perspectives on language and knowledge processing both within and across the respective research fields.

This study explores multicultural and multilingual individuals as two employee groups that gain increased importance for globally operating organizations. Companies have recognized the valuable res...

This study investigates the social capital formation and outcome of two increasingly important groups of employees: multicultural and multilingual individuals. While internationally operating organ...

Academia has changed over the last decades and so have academic careers. In a 2019 special issue of the journal Academy of Management Learning and Education, we have brought together a set of paper...

This study shows which negative emotion language barriers can provoke among multinational team (MNT) members and investigates how MNT leaders can successfully mitigate these detrimental effects. Multilingual teams constitute a leadership context of paramount importance in today's organizations, which prior research has neglected. Our study contributes to the literature on MNT leaders' emotion regulation strategies by investigating the specific challenges they face in this setting. We advance research on leadership in teams by exploring successful leadership strategies geared towards addressing language-induced emotions and by demonstrating the positive outcomes of MNT leaders leveraging their power in this context. Our study contributes to research on language barriers in multinational corporations by introducing the interplay of language-induced emotions and leadership to this area. Furthermore, it contributes to emotion-sensitive organizational studies by specifying previously established emotion management models for multilingual environments. On this basis, we draw conclusions for the development of future MNT leaders.

Extending existing international business (IB) research, we conceptualize shared social identity as an outcome rather than only an antecedent of multinational enterprise knowledge flows to provide an alternative reason for why such knowledge flows occur. We further argue that shared language among subsidiary and headquarters (HQ) managers is an insufficient condition for subsidiary knowledge receipt. Accordingly, we develop a moderated mediation model at the subsidiary level to examine how shared language affects subsidiaries’ tacit knowledge inflows from HQ. Specifically, we study (1) whether this relationship is mediated by the extent to which subsidiary managers share HQ goals and vision, and the extent to which Human Resources decisions are centralized at HQ; and (2) whether subsidiary type (greenfields vs acquisitions) moderates these mediated relationships such that in both cases the mediation will be stronger in foreign acquisitions compared with foreign greenfields. Building on a sample of 817 subsidiaries in 9 countries/regions and a novel subjective measure of shared language, we find support for our model. Implications for research on HQ–subsidiary knowledge flows, social identity theory and the literature on sociolinguistics, and international Human Resource Management are discussed and managerial implications outlined.

Extending existing international business (IB) research, we conceptualize shared social identity as an outcome rather than only an antecedent of multinational enterprise knowledge flows to provide an alternative reason for why such knowledge flows occur. We further argue that shared language among subsidiary and headquarters (HQ) managers is an insufficient condition for subsidiary knowledge receipt. Accordingly, we develop a moderated mediation model at the subsidiary level to examine how shared language affects subsidiaries’ tacit knowledge inflows from HQ. Specifically, we study (1) whether this relationship is mediated by the extent to which subsidiary managers share HQ goals and vision, and the extent to which Human Resources decisions are centralized at HQ; and (2) whether subsidiary type (greenfields vs acquisitions) moderates these mediated relationships such that in both cases the mediation will be stronger in foreign acquisitions compared with foreign greenfields. Building on a sample of 817 subsidiaries in 9 countries/regions and a novel subjective measure of shared language, we find support for our model. Implications for research on HQ–subsidiary knowledge flows, social identity theory and the literature on sociolinguistics, and international Human Resource Management are discussed and managerial implications outlined.

Whereas a comprehensive review of the current state and trends of research in International Human Resource Management (IHRM) is clearly beyond the scope of this introduction (for this, see, for exa...

This article adopts a cognitive neuroscience perspective to develop theory about the consequences of foreign language use in organizational settings. In contrast to previous work that has focused on the interpersonal effects of foreign language use, we focus on intra-personal, cognitive processes that affect employee performance. Our model delineates how foreign language processing depletes cognitive resources, which can ultimately result in biased decision-making and reduced self-regulation. We discuss theoretical and practical implications of our model for international business research in the context of an increasing number of organizations that have adopted a common corporate language.

We explore how Japanese career women experience and respond to the perception of status inconsistency in a career context. Status inconsistency refers to situations in which social actors occupy in...

This study systematically investigates how language barriers influence trust formation in multinational teams (MNTs). On the basis of 90 interviews with team members, team leaders and senior managers in 15 MNTs in 3 German automotive corporations, the authors show how MNT members’ cognitive and emotional reactions to language barriers influence their perceived trustworthiness and intention to trust, which in turn affect trust formation. The authors contribute to diversity research by distinguishing the exclusively negative language effects from the more ambivalent effects of other diversity dimensions. Their findings also illustrate how surface-level language diversity may create perceptions of deep-level diversity. Furthermore, their study advances MNT research by revealing the specific influences of language barriers on team trust, an important mediator between team inputs and performance outcomes. It thereby encourages the examination of other team processes through a language lens. Finally, their study suggests that multilingual settings necessitate a reexamination and modification of the seminal trust theories by Mayer, Davis and Schoorman, and by McAllister. In terms of practical implications, the authors outline how MNT leaders can manage their subordinates’ problematic reactions to language barriers, and how MNT members can enhance their perceived trustworthiness in multilingual settings.

This study examines the degree to which Japanese, German and US multinational corporations (MNCs) use two different subsidiary control mechanisms: direct control through headquarters and indirect control through staffing key positions in subsidiary management with expatriates. On the basis of data from 617 subsidiaries, we found that US MNCs focus more on the former, whereas Japanese MNCs rely primarily on the latter. German MNCs take a middle position. Furthermore, we found across all three countries that the more technical management functions are controlled more tightly than more culturally sensitive areas. The reliance of Japanese MNCs on subsidiary control through expatriates suggests that these corporations have a particularly acute need to invest in global talent management systems.

We developed a model illuminating team knowledge exchange processes as a key link between organizational diversity climate and the effectiveness of multicultural teams (MCTs). Our analysis is based on 143 in-depth interviews and extensive observations of team interactions that occurred in 48 teams from 11 companies. Our findings revealed that teams that oscillated between assertive and cooperative knowledge exchange processes were more effective. We also found such dual processes were more prevalent in organizations that had an engagement-focused diversity climate characterized by utilization of diversity to inform and enhance work processes based on the assumption that cultural differences give rise to different knowledge, insights, and alternative views. Based on our findings we developed specific propositions about optimizing MCT knowledge-exchange processes to guide future research and practice.

The importance of language differences in multinational companies (MNCs) can hardly be overlooked. This paper therefore provides the first large-scale quantitative overview of language competencies, policies and practices in MNCs. It is based on data from more than 800 subsidiaries, located in thirteen different countries with headquarters in more than 25 different countries, which were aggregated into four distinct home country clusters. This comprehensive study allows us to differentiate prior conceptual or case-based findings according to home, host and corporate languages and to develop managerial implications which vary according to the different country clusters.

Drawing on the knowledge-based view of the firm, this paper provides the first empirical study that explicitly investigates the relationship between different categories of international assignees and knowledge transfer in multinational corporations (MNCs). Specifically, we examine (1) the extent to which expatriate presence in different functional areas is related to knowledge transfer from and to headquarters in these functions; and (2) the extent to which different categories of international assignees (expatriates vs. inpatriates) contribute to knowledge transfer from and to headquarters.\ud \ud We base our investigation on a large scale survey, encompassing data from more than 800 subsidiaries of MNCs in thirteen countries. By disaggregating the role of knowledge transfer across management functions, directions of knowledge transfer, and type of international assignees, we find that (1) expatriate presence generally increases function-specific knowledge transfer from and, to a lesser extent, to headquarters; and that (2) the relevance of expatriates and former inpatriates varies for knowledge flows between headquarters and subsidiaries. Additionally, we discuss implications for research and practice, in particular regarding different management functions and different forms of international assignments, and provide suggestions for future research.

This article investigates the degree of conflict between different groups of employees in MNC subsidiaries in relation to different home-host country combinations. More specifically, we compared the degree of conflict of Western subsidiaries in Japan and Japanese subsidiaries in the West. We based our comprehensive investigation on data from 617 US and German subsidiaries in Japan as well as Japanese subsidiaries in the USA and Germany (and, for comparative reasons, US subsidiaries in Germany and German subsidiaries in the US). Possibly rather surprisingly, our results indicate that different degrees of cultural distance between home and host country do not lead to different degrees of conflict in MNC subsidiaries. We suggest that expected conflicts, due to substantial cultural differences, induce employees to actively counteract such problems, leading ultimately to a reduction of real conflicts. Furthermore, while previous literature suggested that in particular Japanese subsidiaries in the West are prone to a high degree of conflicts, our findings suggest that Western subsidiaries in Japan are even more conflict-laden. This should caution Western companies against complacency when operating in Japan.

This paper investigates the importance of culturally and institutionally induced conflicts between home and host country nationals in foreign subsidiaries of multinational corporations (MNCs). our comprehensive investigation of 617 foreign subsidiaries of US, Japanese and german multinationals firstly demonstrates that subsidiary managers attribute such conflicts to both cultural and institutional sources. We also find that cultural sources have a higher conflict potential compared to institutional sources. Further, we demonstrate that with increasing cultural and institutional distances between home and host countries, culturally induced conflicts become relatively more important than institutionally induced conflicts. these results indicate that although institutional differences matter as sources of conflicts between home and host country nationals in foreign subsidiaries, cultural differences matter somewhat more. nevertheless, the paper stresses that both, cultural and institutional sources of conflicts should be considered in conjunction and in an integrative way.

This article explores the key determinants of Islamic retail banking (IRB) in the European context in order to identify major challenges and opportunities for the European IRB market. This investigation is of relevance, as Islamic banking, that is the Shari’ah (Islamic law) compliant way of banking, is on the rise. During the past three decades the industry expanded with double-digit growth rates and there are now more than 300 Islamic financial institutions operating in over 50 countries worldwide.1 As Islamic banking was initially developed in recognition of the need of ordinary Muslims for borrowing and lending, the most prevailing activity of Islamic banking in the predominantly Muslim societies of the Gulf and the Far East is retail banking.2,3 Yet, in most of Europe IRB services offered to the general public are still rare.4 This appears to be a missed business opportunity as Europe’s Muslim community of about 50 million5 clearly outnumbers the total population of the Arab states in the Persian Gulf region of about 36.2 million.6

Our explorative, qualitative study explores the dynamic processes of Chinese subordinates developing trust (or not) in their (culturally distinct) German supervisors. It is based on 95 interviews w...

The past few decades have seen a tremendous growth in work patterns that involve social actors from different cultural backgrounds interacting with one another, as shown by the increase in number and forms of international staff (Collings et al., 2007) or the rise in the formation of international joint ventures (Pothukuchi et al., 2002). Even actors whose scope of activity is limited to a domestic context are likely to be exposed to foreign cultures as they collaborate with coworkers, partners, suppliers and clients from different ethnic and cultural origins. Although research at the interface between the domestic and international context is still relatively scarce, for example as illustrated by the limited attention that local nationals have received in international assignment research (Toh and DeNisi, 2007; Vance and Ring, 1994), scholars widely agree that culture transcends and thus forms an integral part of many aspects in business. One stream of research has explored the multiple layers that constitute culture and that differ in terms of their degree of tangibility and visibility, distinguishing between observable artifacts and behaviors, deeper-level values and basic assumptions (e.g. Schein, 1992). In this vein, existing cross-cultural research has mainly conceptualized culture as a system of shared, underlying values that explain (Hofstede, 1980; Schwartz, 1994) but may also potentially vary from (House et al., 2004) behavioral practices. Another debate has centered on the multiple levels at which culture has been conceptualized to operate (Chao, 2000; Leung et al., 2005). It has been common to consider a hierarchy of levels in which lower levels are nested within higher levels, for example an individual working in a team that forms part of an organization that, in turn, operates in a specific national market. However, these scholars increasingly also point to the cross-level effects that occur when changes at one cultural level influence and reshape other levels. Although the resulting implications are highly relevant to the understanding of cultural phenomena at large, levels issues in cross-cultural research have thus far focused mainly on the different levels at which national culture influences behavioral outcomes, broadly distinguishing between individual, group, and organization-level effects. In this respect, national culture has been shown to have both direct and moderated effects on a wide range of individual and interpersonal attitudes, cognitions and behaviors (Tsui et al., 2007), impact on team processes (Gelfand et al., 2007) and influence various organizational systems, structures and practices, including capital International Journal of Cross Cultural Management 10(2) 131–136 a The Author(s) 2010 Reprints and permissions: sagepub.co.uk/journalsPermissions.nav DOI: 10.1177/1470595810376429 ccm.sagepub.com CCM International Journal of Cross Cultural Management

Copyright @ 2010 The Authors. This is the author's accepted manuscript. The final published article is available from the link below. Researchers have endeavoured to understand the factors that enable effective functioning of multinational teams (MNTs) but with few exceptions they have ignored studying the competences of MNT leaders. In this paper we present those competences leaders must possess in order to effectively lead MNTs. Our findings are based on 70 problem-centred interviews with MNT leaders and members from five multinational corporations. The competences our interviewees mentioned most frequently for effective leadership were knowledge management and transfer. Results further indicated that a leader must be cross-culturally competent and multilingual in order to motivate MNT members to fully explore, exploit and transfer valuable knowledge within the team and beyond.

Summary We propose that the differences in competitiveness of companies from different countries is not just a question of the adoption of ‘better’ management models, as conventional wisdom would have us believe; rather, we contend that national competitiveness can change radically over time without significant changes in management practices. Contrary to much of the management literature we hold that changes in the global business environment often determine to a large degree the competitiveness of companies. Based on our assumptions we offer four specific lessons of how companies can increase their competitiveness within the constraints of the socio-cultural context in which they operate.

The article presents a set of six case studies of multinational teams, each operating within the corporate culture of a different multinational firm. Information on the research protocol, which inc...

Many Western observers perceive the Japanese management model as outdated and uncompetitive. This article explores the future viability of Japanese-style management. After a review of the key characteristics of the Japanese management model, a framework is developed that links four forces of continuity and four opposite forces of change with four different scenarios for the future development of the Japanese management model. Subsequently, the current competitive state and future trends of the Japanese management model, as viewed by 359 high-ranking Japanese managers of major Japanese companies at headquarters and at subsidiaries in the US and in Germany, are described. The data reveal that Japanese managers consider their own management system to be in crisis and in need of substantial changes. Inspirations for this change process appear to come in particular from the US management model. The key challenge for the Japanese management model seems to be to integrate the new, frequently US-inspired management practices with traditional Japanese management methods, so that it can attain a new state of stable equilibrium in which its various components are mutually reinforcing themselves. Concrete practical implications of the findings for Japanese companies, for Western multinationals and for their subsidiaries operating in Japan are highlighted and future research directions outlined.

We scrutinize the explanatory power of one of the key concepts in International Business: the concept of (cultural) distance. Here we focus on its effect on entry mode choice, one of the most researched fields in international business strategy. Our findings might, however, be equally be relevant for the field of International Business as a whole. Our analysis is based on a review of 92 prior studies on entry mode choice, as well as an empirical investigation in over 800 subsidiaries of MNCs, covering nine host and fifteen home countries across the world. We conclude that the explanatory power of distance is highly limited once home and host country context are accounted for, and that any significant effects of cultural distance on entry mode choice might simply be caused by inadequate sampling. Entry mode studies in particular, and International Business research in general, would do well to reconsider its fascination with distance measures, and instead, focus first and foremost on differences in home and host country context. We argue that serious engagement with deep contextualization is necessary in International Business research to pose new and relevant questions and develop new and innovative theories that explain empirical phenomena.

This article contributes to two recurring and very central debates in the international management literature: the convergence vs. divergence debate and the standardization vs. localization debate. Using a large-scale sample of multinationals headquartered in the United States, Japan, and Germany, as well as subsidiaries of multinationals from these three countries in the two other respective countries, we test the extent to which HRM practices in subsidiaries are characterized by country-of-origin, localization, and dominance effects. Our results show that overall the dominance effect is most important (i.e., subsidiary practices appear to converge to the dominant U.S. practices). Hence, our results lead to the rather surprising conclusion for what might be considered to be the most localized of functions—HRM—that convergence to a worldwide best practices model is clearly present. The lack of country-of-origin effects for Japanese and German multinationals leads us to a conclusion that is of significant theoretical as well as practical relevance. Multinationals might limit the export of country-of-origin practices to their core competences and converge to best practices in other areas. © 2007 Wiley Periodicals, Inc.

This paper demonstrates that American and Japanese HR managers hardly perceive German human resource management (HRM) as a role model from which they might wish to learn. As will be shown, the reason for this attitude is that American and Japanese HR managers have barely any knowledge about German HRM. It is argued here that this lack of knowledge results from the rather ‘balanced’, ‘moderate’ and ‘equilibrated’ character of German HRM, making it very difficult to define and grasp the essence of German HRM. Paradoxically, however, the data suggest that it is exactly this ‘balanced’ approach for which HR managers from the USA, Japan and Germany are striving.

The seniority principle has often been described as a key ingredient in the traditional Japanese HRM model. However, increasing numbers of testimonials in the literature report that this practice is dramatically declining in significance. Results of this empirical study indicate that: 1) compared to the past, the seniority principle is significantly losing importance for promotion and compensation decisions; 2) this is a trend likely to continue into the future; 3) the seniority principle is declining more than any other Japanese HRM practice; 4) the American model serves as an important source of inspiration in introducing a more performance-oriented system; 5) when compared to western countries, however, seniority is likely to remain of importance. Suggestions are put forward as to how a performance based promotion and compensation system might suit the specific Japanese context better than western practices do.