Strategies for Coping with Language Diversity in International Small Firms: A Longitudinal Study

This thesis focuses on firm strategies for coping with external language diversity. Three such strategies, namely firm-level language selection, development of language performance standards, and language-based relationship sensemaking, are explored to understand how they are adopted over time in the context of internationally active small firms. Most empirical language-focused international business (IB) research shows that language differences in external business environments lead multinational enterprises (MNEs) to adopt different language strategies, depending on their market selection and expansion policies, language priorities, managerial capabilities, etc. However, these extant findings cannot simply be assumed to apply to small and medium-sized enterprises (SMEs) as these differ in many important respects from MNEs. SMEs usually cannot afford high work role specialization to plan and deal with the specific language preferences of external actors, while language competence and preferences of key decision-makers influence firms’ language-related strategies to a greater extent than in MNEs. Yet, coping with external language diversity with appropriate strategies is essential for internationally active SMEs to utilize the resources at hand for survival.

Empirically, this research captures the initiatives and activities of international small firm decision-makers and the process of coping with external language diversity over time. The study concentrates on strategy development and implementation at three organizational levels. At the firm level, I explore the initiatives and activities of small firm decision-makers in overcoming the language choice dilemma between English-only and multilingualism by selecting appropriate firm-level language(s). At the unit level, this research focuses on the role of HR decision-makers in developing employees’ language performance standards and thereby depicting the process of such standards development. At the individual level, the focus is on the process of understanding external business relationships from decision-makers’ language background perspectives.

The research was conducted longitudinally over 5 years in 22 Finnish international small firms from the following industries: biotech, fashion and design (including clothing), food and beverage, music and sound, glass engineering, and software. 26 decision-makers were interviewed repeatedly to obtain an in-depth, holistic understanding of the phenomena under study. While a total of 117 interviews were the main source of data, I also drew upon observations and secondary data sources to triangulate primary data with secondary data sources. The observations included visiting the office environment including official internal notices or bulletin boards, pictures, posters, and banners; HR notes, emails between HR and employees, employee performance appraisal forms, and HR meeting minutes; and attending seminars and marketing campaign events. As to secondary data, the websites and Facebook posts of all 22 firms were visited several times to follow up on the language-related strategies of the sample firms over time. All collected data were stored manually in MS Word and MS Office, and both manual content analysis and NVivo 10 qualitative software were used to search for and code central themes for data analysis, following an inductive approach.

The data analysis shows that the adoption of strategies for coping with external language diversity can be viewed as a social exchange behavior of firm decision-makers in recognizing, evaluating, and deciding on the selection and continuation of appropriate language-related strategies. Realizing the need for appropriate language strategies to enhance tangible and intangible resource sharing for firm survival, firm decision-makers initiate the exchange of expectations with external actors. By understanding external actors’ language preferences in terms of language-based status, social acceptance, affinity, and identity, and addressing these by using one or more appropriate languages, decision-makers can grow mutual understanding, build trust, and increase interest in resource sharing. In the present study, this is operationalized as decision-makers’ choice between English-only and multilingualism. Similarly, decision-makers attempt to develop employees’ language performance standards to ensure that they can be expected to cope with external language diversity. Developing such standards takes place as a negotiation process between HR decision-makers and firm employees, during which decision-makers attempt to understand the needs of employees and provide them with timely and adequate HR-related support. Finally, the sensemaking of business relationships and the selection and deepening of business-to-business (B2B) relationships with particular partners is influenced by decision-makers’ perceptions of language-based affinity and identity, forming a lens through which they set their expectations, negotiate, and evaluate the outcome of relationships with external exchange partners. However, all these three language-related strategies are influenced by the limited resources, informality, and flexible work structures characteristic of small firms.

This study contributes to the existing literature on language in IB, language-sensitive HRM practices, language-based B2B sensemaking, SMEs, and social exchange theory (SET). It highlights not only how language-related strategies are adopted in international small firms, but also why they are adopted—finding out triggers and expected outcomes. The study also has important implications for managers and policymakers, enabling them to make more informed and critical decisions to cope with external language diversity with available limited resources.