Babel in business: The language barrier and its solutions in the HQ-subsidiary relationship

Using interview data from managers in eight German and Japanese corporate HQs and their subsidiaries in Japan or Germany, we provide the first large-scale empirical analysis of the language barrier and its solutions. We found that language is an important barrier, slowing down and increasing the cost of decision-making. Our research suggests twelve different solutions, ranging from informal day-to-day solutions such as changing communication patterns and code-switching, to more structural solutions such as language training and a common corporate language. We confirm and extend previous research and conclude that future research should more explicitly consider the different configurations of language skills for HQ and subsidiary managers. (C) 2010 Elsevier Inc. All rights reserved.