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Language and foreign subsidiary control: An empirical test

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  • Björkman, Anette
  • Piekkari, Rebecca
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    Abstract

    Previous research suggests that language competence has an effect on foreign subsidiary control but its precise nature remains unclear. In a sample of 119 Western-owned subsidiaries in Finland and China, we empirically tested how foreign subsidiaries with varying degrees of language competence were controlled. We carried out structured interviews with the general managers of these subsidiaries in order to assess the effect of language at the level of specific control mechanisms. According to our findings, the subsidiaries with low language competence were controlled to a greater extent by centralization and formalization than units with high language competence. Output control and socialization mechanisms appeared unaffected by language competence of subsidiary staff.

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    Bibliographic Info

    Article provided by Elsevier in its journal Journal of International Management.

    Volume (Year): 15 (2009)
    Issue (Month): 1 (March)
    Pages: 105-117

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    Handle: RePEc:eee:intman:v:15:y:2009:i:1:p:105-117

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    Related research

    Keywords: Headquarters-subsidiary relationship Language competence Control;

    References

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    Cited by:
    1. Piekkari, Rebecca & Oxelheim, Lars & Randøy, Trond, 2013. "The Role of Language in Corporate Governance: The Case of Board Internationalization," Working Paper Series 974, Research Institute of Industrial Economics.
    2. Victor Oltra & Jaime Bonache & Chris Brewster, 2013. "A New Framework for Understanding Inequalities Between Expatriates and Host Country Nationals," Journal of Business Ethics, Springer, vol. 115(2), pages 291-310, June.
    3. Schomaker, Margaret Spring & Zaheer, Srilata, 2014. "The Role of Language in Knowledge Transfer to Geographically Dispersed Manufacturing Operations," Journal of International Management, Elsevier, vol. 20(1), pages 55-72.

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