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Language and foreign subsidiary control: An empirical test

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  • Björkman, Anette
  • Piekkari, Rebecca

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.

Suggested Citation

  • Björkman, Anette & Piekkari, Rebecca, 2009. "Language and foreign subsidiary control: An empirical test," Journal of International Management, Elsevier, vol. 15(1), pages 105-117, March.
  • Handle: RePEc:eee:intman:v:15:y:2009:i:1:p:105-117
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    References listed on IDEAS

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    1. repec:spr:manint:v:53:y:2013:i:3:d:10.1007_s11575-012-0154-z is not listed on IDEAS
    2. Klitmøller, Anders & Lauring, Jakob, 2016. "When distance is good: A construal level perspective on perceptions of inclusive international language use," International Business Review, Elsevier, vol. 25(1), pages 276-285.
    3. 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.
    4. 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.
    5. Du, Yan & Deloof, Marc & Jorissen, Ann, 2015. "The Roles of Subsidiary Boards in Multinational Enterprises," Journal of International Management, Elsevier, vol. 21(3), pages 169-181.
    6. Peltokorpi, Vesa, 2015. "Foreign subsidiary top manager nationality and language policy: The moderating effects of subsidiary age and size," International Business Review, Elsevier, vol. 24(5), pages 739-748.
    7. 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.
    8. Alfredo Jiménez & David Fuente, 2016. "Learning from Others: the Impact of Vicarious Experience on the Psychic Distance and FDI Relationship," Management International Review, Springer, vol. 56(5), pages 633-664, October.

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