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Top 10 International Business Negotiation Case Studies

International business negotiation case studies offer insights to business negotiators who face challenges in the realm of cross-cultural business negotiation..

By PON Staff — on March 26th, 2024 / International Negotiation

If you engage in international negotiation , you can improve your odds of success by learning from these 10 well-known international business negotiation case studies:

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• Apple’s Apology in China

When Apple CEO Timothy D. Cook apologized to Apple customers in China for problems arising from Apple’s warranty policy, he promised to rectify the issue. In a negotiation research study, Professor William W. Maddux of INSEAD and his colleagues compared reactions to apologies in the United States and in Japan. They discovered that in “collectivist cultures” such as China and Japan, apologies can be particularly effective in repairing broken trust, regardless of whether the person apologizing is to blame. This may be especially true in a cross-cultural business negotiation such as this one.

• Bangladesh Factory-Safety Agreements

In this negotiation case study, an eight-story factory collapsed in Bangladesh, killing an estimated 1,129 people, most of whom were low-wage garment workers manufacturing goods for foreign retailers. Following the tragedy, companies that outsourced their garment production faced public pressure to improve conditions for foreign workers. Labor unions focused their efforts on persuading Swedish “cheap chic” giant H&M to take the lead on safety improvements. This negotiation case study highlights the pros and cons of all-inclusive, diffuse agreements versus targeted, specific agreements.

• The Microsoft-Nokia Deal

Microsoft made the surprising announcement that it was purchasing Finnish mobile handset maker Nokia for $7.2 billion, a merger aimed at building Microsoft’s mobile and smartphone offerings. The merger faced even more complexity after the ink dried on the contract—namely, the challenges of integrating employees from different cultures. International business negotiation case studies such as this one underscore the difficulties that companies face when attempting to negotiate two different identities.

• The Cyprus Crisis

With the economy of the tiny Mediterranean island nation Cyprus near collapse, the International Monetary Fund (IMF), European Central Bank (ECB), and the European Commission teamed up to offer a 10-billion-euro bailout package contingent on Cyprus provisioning a substantial amount of the money through a one-time tax on ordinary Cypriot bank depositors. The move proved extremely unpopular in Cyprus and protests resulted. The nation’s president was left scrambling for a backup plan. The lesson from international business negotiation case studies such as this? Sometimes the best deal you can get may be better than no deal at all.

• Dissent in the European Union

The European Union (EU) held a summit to address the coordination of economic activities and policies among EU member states. German resistance to such a global deal was strong, and pessimism about a unified EU banking system ran high as a result of the EU financial crisis. The conflict reflects the difficulty of forging  multiparty agreements  during times of stress and crisis.

• North and South Korea Talks Collapse

Negotiations between North Korea and South Korea were supposed to begin in Seoul aimed at lessening tensions between the divided nations. It would have been the highest government dialogue between the two nations in years. Just before negotiations were due to start, however, North Korea complained that it was insulted that the lead negotiator from the South wasn’t higher in status. The conflict escalated, and North Korea ultimately withdrew from the talks. The case highlights the importance of pride and power perceptions in international negotiations.

• Canceled Talks for the U.S. and Russia

Then-U.S. president Barack Obama canceled a scheduled summit with Russian President Vladimir Putin, citing a lack of progress on a variety of negotiations. The announcement came on the heels of Russia’s decision to grant temporary asylum to former National Security Agency contractor Edward Snowden, who made confidential data on American surveillance programs public. From international business negotiation case studies such as this, we can learn strategic reasons for  breaking off ties , if only temporarily, with a counterpart.

• The East China Sea Dispute

In recent years, several nations, including China and Japan, have laid claim to a chain of islands in the East China Sea. China’s creation of an “air defense” zone over the islands led to an international dispute with Japan. International negotiators seeking to resolve complex disputes may gain valuable advice from this negotiation case study, which involves issues of international law as well as perceptions of relative strength or weakness in negotiations.

• An International Deal with Syria

When then-U.S. Secretary of State John Kerry and his Russian counterpart, Sergey Lavrov, announced a deal to prevent the United States from entering the Syrian War, it was contingent on Syrian President Bashar al-Assad’s promise to dismantle his nation’s chemical weapons. Like other real-life negotiation case studies, this one highlights the value of expanding our focus in negotiation.

• A Nuclear Deal with Iran

When the United States and five other world powers announced an interim agreement to temporarily freeze Iran’s nuclear program, the six-month accord, which eventually led to a full-scale agreement in 2015, was designed to give international negotiators time to negotiate a more comprehensive pact that would remove the threat of Iran producing nuclear weapons. As Iranian President Hassan Rouhani insisted that Iran had a sovereign right to enrich uranium, the United States rejected Iran’s claim to having a “right to enrich” but agreed to allow Iran to continue to enrich at a low level, a concession that allowed a deal to emerge.

What international business negotiation case studies in the news have you learned from in recent years?

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Why Study Global Business? 5 Benefits to Consider

• 27 May 2021

You may have heard the age-old phrase, “It’s a small world.” In a time of advanced technology, the world not only feels small in terms of accessibility, but in terms of connectivity. It’s impossible to avoid being impacted by the decisions made by others around the globe—and no field showcases this dynamic better than business.

If you own a company or are a key employee, the actions and plans of business and political leaders worldwide impact your organization's trajectory, whether or not you operate internationally.

Because global business is such a multifaceted field that’s often studded with high-risk, high-reward opportunities , it can be intimidating to dive in. Here’s a look at what global business is, five ways studying it can help you as an organizational leader, and how to kick off your education.

What Is Global Business?

Global business , also called international business , is the production and sale of goods and services between countries. The term can also encompass the nuances, politics, and dynamics of doing business in a global economy.

There are three major categories international businesses can fall into:

• They produce goods domestically and sell domestically and internationally
• They produce goods in a different country but sell domestically
• They produce goods in a different country and sell domestically and internationally

If your business produces and sells strictly domestically, you may choose to expand internationally for the positive short- and long-term impacts on financial performance, increased production capabilities, new markets, and opportunities to join global business networks. Some examples of successful international businesses include well-known companies such as Walmart and Starbucks.

Why Is Global Business Important?

Even if your organization doesn’t produce or sell products internationally, the importance of global business can’t be overstated. It can enable you to assess new business opportunities, make informed decisions, and adopt a holistic view of global competition from a strategic standpoint.

For instance, imagine you own a clothing company that sells embroidered T-shirts. Your products are made in the United States from locally sourced material, and you only sell domestically. How might global business impact your company?

• Domestic competitors may produce or sell their products internationally and gain more traction. For instance, a rival company sources cotton from a farm abroad and charges less money for similarly embroidered T-shirts. It then develops a global audience and presence, perhaps where clothing trends differ from those of the US.
• Internationally-based companies could become your competitors, too. For example, a clothing company based in the United Kingdom may expand into the US and win over your customers.
• Laws in other countries regarding the taxation, production, and importation of goods may impact the market you operate in. Policy changes, even those made abroad, can have a ripple effect that impacts your domestic business.

Studying global business can enable you to navigate the challenging, ever-changing business world while capitalizing on opportunities for expansion and connection. Here are five benefits of studying global business to consider.

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Benefits of Studying Global Business

1. understand macroeconomics.

One benefit of studying global business is that you gain awareness of the dynamics of macroeconomics. You develop an understanding of economic metrics you can use to compare countries on a one-to-one basis and several other factors that impact a country’s economic health. These factors provide insights into how a country’s business economics impact its residents and other organizations.

Some metrics you can learn to use include:

• Gross domestic product (GDP)
• Unemployment rate
• Inflation rate
• Degree of income inequality
• Currency exchange rate

“It seems obvious why companies with operations or customers spanning the globe would have to worry about global macroeconomics,” says Harvard Business School Professor Forest Reinhardt in the online course Global Business . “If exchange rates move or inflation changes at different rates in different countries, it’s going to affect the economic performance of those firms.”

Reinhardt also stresses that even domestically operated companies need to understand macroeconomics.

“What about companies that make a product domestically and sell it domestically?” he asks. “Are they exposed to the global economy? It seems natural to say ‘no,’ but that turns out not to be the case.”

Learning a common language with which to assess and compare different countries’ economic performances can provide a foundation for your international business education.

2. Gain an Appreciation for Different Cultures

Just as important as the “hard skills” of macroeconomics are the “soft skills”—such as emotional intelligence —required to tactfully and respectfully navigate an international business world. Diving into global business means exposing yourself to cultures that might greatly differ from your own. Learning about the customs, holidays, beliefs, social norms, and expectations of the cultures in countries where you’ll be working, selling, and employing people is invaluable when making connections.

Some examples of cultural differences in business include:

• Personal space: While it might be standard in some cultures to greet with a handshake, understand that there are other ways business associates meet one another in other cultures that reflect different comfort levels around personal space.
• Communicating objectives: While people of some cultures are comfortable with short and direct instructions or requests for fast decision-making, others might be accustomed to require more explanation before moving forward.
• Etiquette: Small differences regarding how associates formally address one another, as well as specific gestures to avoid, reflect the importance of learning the nuances of different cultures.

Remember to keep an open mind and lead with curiosity, empathy, and respect. At the heart of every business deal is a relationship between people; set yourself up to forge meaningful relationships with professionals in other countries by expanding your cultural competency.

Related: 6 Tips for Managing Global & International Teams

3. Navigate the Opportunities and Challenges of International Politics in Business

Because political leaders and systems have the power to influence education, transportation, laws, and taxes, they can also alter the global business landscape.

Studying global business can prepare you for scenarios that occur as a result of political decisions. It can also give you a tool kit for thinking on your feet when the unexpected happens.

One such unexpected event was the coronavirus (COVID-19) pandemic , which swept the world starting in early 2020. The pandemic devastated communities with deaths and health complications and caused international tensions and economic and political unrest.

According to an article by EY , the incidence of political risk—defined as a political event that alters the expected value of a business investment or economic outcome—has increased dramatically in recent years, hitting its highest point since World War II between 2016 and 2018. The tensions resulting from COVID-19 are likely to send the incidence of political risk to a new high.

EY outlines five key business areas that can be impacted by geopolitical risk:

• Cost of capital
• Cross-border flows
• Market entry and global footprint
• Corporate responsibility

“While 51 percent of global executives say political risk is having a greater effect on their companies today than just two years ago, 50 percent are also very confident in their ability to effectively manage it,” the firm reported in 2019 .

In a time when political risk is predicted to reach an all-time high, having a background in global business can help you navigate these unexpected dynamics and gain the confidence to capitalize on opportunities for success.

Related: 5 Common Challenges of International Business You Should Consider

4. Learn from Others’ Triumphs and Mistakes

Another benefit of studying global business is learning about the triumphs and failures of international businesses that came before yours. Because global business can be equally rewarding and challenging, familiarizing yourself with other firms’ strategies can help inform your own strategic planning process .

Hearing real business leaders—maybe from your specific industry—tell the stories of their forays into the global economy can bring humanity to concepts and frameworks and allow you to put yourself in their shoes. Would you have made the same decisions they did? If so, what were the outcomes of those decisions, and how did they impact their business? What can you learn from their stories to be better prepared for your involvement in international business?

To ensure your global business education includes this benefit, look for a course offering that uses the case method or be prepared to research examples independently.

Related: The History of the Case Study at Harvard Business School

5. Craft Winning Business Strategies

A long-term benefit of studying international business is developing the ability to think on a global scale, and thus formulate strategies for your business with the big picture in mind.

When crafting winning strategies, it’s important to keep in mind all factors that could possibly impact your business’s trajectory toward its goals. In a global market, that list of factors must include the political and social relations between countries where your organization operates and your market’s global economic trends.

A global business education may also inform the strategic goals your firm pursues; for instance, expanding into another country where your product could fill an unmet need.

It’s important to remember that the international business landscape is always evolving. As such, so should your business strategy.

Demand for International Business Skills

Another important benefit of studying international business is the diversity and strength it brings to your professional skill set. As the world becomes more interconnected than ever before, employers are increasingly regarding international business as a desired skill for future hires.

Some of the top industries hiring people with international business skills are:

• Manufacturing
• Professional, scientific, and technical services
• Educational services
• Transportation and warehousing

This trend is not only reflected across industries, but also across job postings. Some of the most common job titles that require international business skills are:

• Global Trade Analyst
• Conflict Analyst
• Global Services Consultant
• Tax Manager

By seeking education in global business, you can diversify your future job opportunities while also ensuring that you’re a well-rounded professional.

How to Start Studying Global Business

Starting your global business education doesn’t need to be difficult—in fact, it can be as simple as diversifying your daily news intake to include international publications. Keeping up on current events, international politics, and relationships between countries can enable you to envision how your business is impacted by and fits into the global sphere. Research the leading businesses in your organization’s market and adjacent markets. Where are they based? What do their supply chains look like? In which countries do they sell products?

Additionally, learning about other cultures can give you the knowledge and respect necessary for making global connections that serve you well professionally and personally.

If you’d like to take your education one step further, consider taking an online course like Global Business . Taught by HBS Professor Forest Reinhardt, the course equips learners with the knowledge to navigate the global business landscape’s challenges and opportunities. For the full global experience, make sure the course you select has a social component—a cornerstone of HBS Online courses—so you can learn from and share knowledge with business professionals around the world.

Are you interested in breaking into a global market? Sharpen your knowledge of the international business world with our four-week online course Global Business , and explore our other business in society courses. Not sure which is right for you? Download our free course flowchart .

This post was originally published on May 27, 2021. It was updated on August 5, 2022.

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What Makes International Business Unique and Important as a Field? The Three Cs of IB

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We propose a framework for what makes international business important and relevant as a field, based on three attributes that are critical in our research and teaching: context, connection, and complexity. Context refers to examining firms in their environment and not in a vacuum. Connection captures how the field bridges disciplines, nations, and analytical levels. Complexity denotes the systemic nature of the field. We apply this framework to the multinational enterprise and discuss applied insights for various key stakeholders.

Introduction

International business (IB) is ubiquitous in our lives, as evidenced by the growth of international companies, products, and services that most of us are exposed to on a regular basis, sometimes inadvertently. [1] At the same time, after decades of increased globalization, we are seeing greater anti-globalization and economic nationalism sentiment take hold throughout much of the world (Stiglitz , 2002 , 2016) . Disruptions such as the COVID-19 global pandemic and ensuing financial crisis are showing uneven recovery across different parts of the world, especially between developing and developed markets (UNCTAD , 2021a , 2021b) . These trends highlight the complexities involved in IB, and the criticality of having a field expressly focused on them.

The IB academic field is thus needed now more than ever, both in terms of teaching - to help our students develop a global mindset (Paik , 2020) , and in terms of research - to study and understand the richness and complexity of international phenomena (Shenkar , 2004; Sullivan , 1998) . This requires that universities have a robust IB faculty, ideally organized within IB departments, which can use their expertise to develop strong IB courses and programs.

The results of the 2020 AIB Curriculum Survey show that although the field of IB has made significant progress, implementation of IB across schools has been uneven (Kwok , Grosse , Fey , & Lyles , 2020) . The survey, which covers 192 business schools worldwide, [2] provides valuable insights as to why this is the case. AACSB requires that a global component be included in the curriculum, but the ways it can be implemented are broad, leading to wide differences and gaps in the development of IB across schools. For instance, IB can be taught either through stand-alone IB courses (i.e., general IB courses or specialized IB courses) or by adding IB content to extant functional courses (e.g., a Management or Marketing course with some IB coverage). A significant amount of the growth in IB in schools has been through the latter approach. Importantly, the survey found that the greater the number of stand-alone IB courses offered by a school, the greater the amount of IB knowledge students obtain during their program. On the other hand, the number of courses where IB is added to extant functional courses had no significant effect on the IB knowledge of students by graduation. This may occur in part because faculty teaching functional courses may vary in the level of their international expertise. Similarly, there is a longstanding debate on whether IB should be a stand-alone subject area or where the adjective “international” should simply be subsumed within the functional areas of business (e.g., international marketing, international accounting, etc.). Relatedly, this decision often informs whether IB departments are needed, or IB faculty can be placed in functional departments. The survey identifies four ways IB faculty can be organized: in functional area departments without identification as IB faculty (49% of schools), in functional area departments with identification as IB faculty (16%), in a matrix structure where the faculty are in functional area departments but are also part of an IB center/institute (19%), and in stand-alone IB departments (16%). With nearly half of the schools pursuing the first approach, this creates a disincentive for scholars to enter the IB field, given the higher number of academic jobs available in the functional business areas. For those that do enter and are placed in a functional department, there is a further disincentive to publish IB work, as international research is time consuming and difficult and non-IB colleagues may not appreciate these challenges. It can also be difficult to publish international research in the top field journals. Indeed, the survey discusses how the percentage of published academic work with explicit international content in the top 20 academic journals is very slim. Related to the debate on whether IB should be considered a self-standing field of research and teaching is whether the Journal of International Business Studies ( JIBS ), the top IB journal, is considered a top journal. The sample in the survey shows that 69% of the schools worldwide consider JIBS a top journal and that number is 62% in the US and Canada. This creates a further disincentive to specialize in IB if not all universities accept JIBS as a top-tier journal despite its low manuscript acceptance rate, very high impact factor, inclusion in both the FT50 and UT Dallas 24 journal rankings, and a four star ABS ranking.

As this survey shows, the IB field could be in peril and hampered in its future growth potential if it fails to convincingly show what makes it unique, important, and relevant. Building on prior work focusing on outlining the domain and role of IB (e.g., Littrell & Rottig , 2013; Rottig & Mezias , 2017a ) and developing greater legitimacy and relevance for the field (e.g., Rottig & Mezias , 2017b ), this article is designed to help address this issue by developing a simple but powerful framework that displays the value of IB as a field.

What makes the IB field unique and important? The three C’s of IB: context, connection, and complexity. Context denotes the importance of examining firms in their environments and not in a vacuum. Connection addresses how the field links disciplines, nations, and levels of analysis. Complexity refers to how the field is systemic by its very nature. We apply this framework to the multinational enterprise (MNE) to display the richness of our field. We then discuss implications of the 3Cs framework for various key stakeholders and close with areas for future work.

The Three Cs of IB

IB is unique in its focus on context, connection, and complexity. We discuss each of these interrelated aspects below and summarize them in the 3Cs framework presented in Figure 1 . Furthermore, Table 1 provides examples of how each of these aspects applies to IB researchers, educators, practitioners, and policymakers. This helps to show how the framework can serve as a valuable pedagogical tool.

This section briefly introduces each of the 3Cs, while the next section develops them further by applying the framework to the MNE.

A key notion in the IB field is that context matters (c.f., Foss & Pedersen , 2019 ). Firms and context interact as firms do not operate in a vacuum or in isolation. The field routinely examines context through formal and informal institutional frameworks, cultural frameworks, and contextual changes over time. Other business fields may consider it as a secondary aspect, whereas IB sees it as central. Indeed, IB uniquely brings context into play as a focal dimension making research relevant, generalizable, and timely. Examining firms in a single context provides narrow findings that are typically not generalizable across contexts. IB allows for a broader view that crosses borders and other domains. IB is also particularly relevant to what is happening in the world today. It often examines big questions, instead of just focusing on incremental work (e.g., Buckley , 2020 ). In addition, IB has the advantage of being an established field. If one agrees that the interaction of context and business matters, then it needs to be examined in an organized way. IB serves as the established field to accomplish this.

This point cannot be overstated, as suggesting that IB could simply be subsumed into other business disciplines or departments would no doubt lead to less attention to context as a central element in research, teaching, and ultimately practice. IB academics, who are grounded in the importance of context, are therefore particularly well suited to study and train future business leaders and policymakers in the nuances of context, and to help them develop a global mindset that can appreciate differences and become more open to global business and economic opportunities (c.f., Kwok et al. , 2020 ).

Connection refers to how IB bridges different disciplines, nations, and levels of analysis (c.f., Eden , 2008 ). It also connects each of these aspects dynamically, examining changes over time. First, IB is cross-disciplinary or interdisciplinary by its very nature, as the study of context requires considering societal, economic, political, etc. aspects. IB helps connect disciplines and scholars within business (e.g., international management, international marketing, international finance, international accounting, international supply chain management, etc.) and between business and outside fields (e.g., sociology, psychology, anthropology, political economy, economics, political science, economic geography, international affairs, etc.). Second, IB is cross-national as it examines questions across borders and other geographic aspects. It examines aspects such as flows of knowledge and other resources across geographic space. Third, IB is cross-level as it allows for research that crosses levels of analysis. Among others, these can include the global, supra-national, regional, national, industry, firm, department, work group, and individual levels of analysis.

IB thus provides a unique space within business academia that encourages bridging otherwise disconnected conversations across disciplines, nations, and levels of analysis (e.g., through AIB’s portfolio of academic journals: JIBS , JIBP , and AIB Insights ). Furthermore, IB education provides a setting that facilitates creating linkages and knowledge integration for students across courses and other areas. This can lead to managers and public policy practitioners trained in IB who are better grounded in an understanding of connectivity across different domains. As a result, IB can help enrich research, teaching, and practice beyond its own field in ways that are not always evident.

Building on the first two Cs, it is the contextual and comparative nature of IB that leads to its ability to examine complex systems, structures, and relationships in a meaningful manner (c.f., Eden & Nielsen , 2020 ). Other business fields also examine organizational complexity, but IB goes beyond by adding to this the contextual and connective elements described above, as well as the systemic, comparative, and real world elements described here.

In particular, IB is systemic in nature . Systems theory suggests that a whole is greater than the sum of its parts, as it also requires considering the interactions between them. For instance, an NGO involved in giving tiny loans to mostly unbanked entrepreneurs (such as Grameen Bank) is more than just an intermediary obtaining grants or deposits that it redistributes to its target segment, as it has to bring together international philanthropic groups, local governments, village leaders, social workers and educators, to create systemic change in underserved communities. Its ability to combine these elements creates something far more complex than what just being an intermediary between two parties can achieve. Relatedly, IB is comparative in that it allows for research that examines differences and similarities across units of analysis (e.g. organizations, nations, institutions, regions of the world, etc.), constructs, categories, theories, etc. Through this focus on comparative analysis, the field seeks to understand why otherwise similar firms or other business actors are organized in different ways across countries.

As a result of these factors, IB provides real world implications. Examining firms in a vacuum misses the systemic social, political and economic embeddedness of firms, often leading to findings that are not useful in the real world. IB avoids this trap by considering firms as part of larger systems. This allows IB scholars to examine highly complex theory and phenomena, IB educators to train students to develop systemic and critical thinking skills, and IB practitioners and policymakers to be better prepared for the complexities of today’s global environment. Systems thinking is thus required in IB research, teaching, and practice, leading to greater complexity, but also greater richness and usefulness.

IB as a Field Embracing the 3Cs

Of course, not all IB research projects capture the full intricacy of the factors in the 3Cs framework, but they do together as a field. IB creates opportunities for teaching and research across business fields and disciplines, across countries, across levels of analysis, and over time. IB as a field is thus uniquely characterized by context, connection, and complexity.

Applied Example: The 3 Cs and the MNE

Figures 2-4 show the MNE as an ideal example applying context, connection, and complexity to IB. [3] This example serves to show how IB allows for a study of complex questions beyond that of any single field. It shows how IB is systemic, interdisciplinary, cross-level, etc. It is a powerful visual way to show how rich and far reaching our field is. This example also allows us to delve deeper into each of the 3Cs in an applied manner.

These figures illustrate how context, connection, and complexity come into play in IB. These figures are built step-by-step in sequential order, to help show how the completed diagram in Figure 4 is constructed. In particular, Figure 2 first shows the parent firm with individuals nested across functional areas and then adds the home country environment of the parent firm. Figure 3 then builds on this by adding the firm’s international subsidiaries, each with individuals nested across functional areas, as well as the host country environments for each of these subsidiaries. Figure 4 further builds on this by adding the global environment. Finally, Figure 4 adds the relationships and knowledge flows between the parent firm and its subsidiaries. Furthermore, IB considers dynamic effects and change over time across the full system.

More specifically, the figure illustrates context by showing the national environment of the parent firm and of each foreign subsidiary, as well as the global environment within which the full MNE is nested. It illustrates connection by showing how it is cross-disciplinary (with functional areas within the firm and political/economic/social/etc. factors being considered), cross-country (with headquarters and affiliates across home and host countries), and cross-level (with individuals nested within functional areas, nested within firms, nested within countries’ cultural and institutional contexts, nested within the global cultural and institutional environment). It illustrates complexity by showing how examining the MNE requires systemic thinking that considers all of these factors and their relationships in a holistic manner.

This helps to illustrate that contrary to functional fields that often examine their areas separately, IB requires systemic thinking where the complex relationships between business units, functional areas, national environments, and the global environment are all considered in unison.

This is what makes IB so fascinating yet so challenging. It avoids examining companies in a vacuum –assuming away context, connection, and complexity– which would be at the cost of reducing relevance in its findings. Systemic thinking is challenging but critical for relevance.

Applied Insights: The IB Academic Community

The direct result of the field’s focus on context, connection, and complexity is a distinctive academic community. The IB community is a unique group of scholars within business academia, which provides a forum for collaboration across geographies, disciplines, theoretical frameworks and methodologies, levels of analysis, and generations of scholars. It is comparable to communities in other social sciences such as international affairs and international political economy, but distinct within business. One may find parallels in some or other of these points with other business academic communities, but the IB community is unique in comprising all of these attributes.

Geographies (Global Mindset)

IB is a global community rich with exchange of information and other resources across nations and other geographic settings. Other fields may have international collaborations (e.g., in terms of teaching and research), but it is something that is embedded in the DNA of our field, which creates a very special community of globally-minded individuals.

IB academics are particularly well prepared to work in the development and teaching of international programs (e.g., study abroad, international internships), which are a staple of many universities. Indeed, IB scholars are trained to think with a global mindset, allowing them to help students develop a similar mindset, which can provide an important advantage in their careers. This global mindset also means IB scholars are particularly well suited for the type of research that is conducted in the field (c.f., Kwok et al. , 2020 ).

Disciplines (Interdisciplinary)

Given its interdisciplinary nature, IB serves as a broad umbrella field providing a forum for scholars from across fields – within and outside of business – to come together in their research and teaching pursuits (c.f., Kwok et al. , 2020 ).

Theoretical Frameworks and Methodologies

Given its interdisciplinary nature, the field is ecumenical about theoretical frameworks and methodologies, allowing for a community of scholars with a broad perspective.

Levels of Analysis

IB is also a community of scholars spanning work at and across different levels of analysis. These levels span from the individual, workgroup, and department levels, all the way up to the firm, national, and supranational levels. This allows for knowledge exchange and systemic thinking across levels.

This article proposes that what makes IB unique and important as a field are three C’s: context, connection, and complexity. It contributes to the literature by providing this in a simple but rich framework. It also applies this to the MNE, examines implications for various stakeholders, and discusses the importance of the IB community. Future work can extend this in various ways, such as by applying the 3Cs of IB framework to ‘big questions’ and ‘grand challenges’ facing the world today (Buckley , 2020; Eden , 2020; Rottig & Mezias , 2016) . We thus hope this article will be of great benefit to our fellow colleagues.

Acknowledgements

This project was commissioned by the AIB Executive Board (President Chuck Kwok and President-Elect Jeremy Clegg; Vice Presidents Program Rebecca Piekkari, Gary Knight, and Maria Tereza Leme Fleury; Vice Presidents of Administration Helena Barnard, Luis Alfonso Dau, and Rebecca Reuber; and Executive Director Tunga Kiyak), with the support of the other members of the AIB Secretariat (Anne Hoekman, Kathy Kiessling, Dan Rosplock, and Irem Kiyak). It was developed by the AIB Uniqueness Task Force (composed of the authors of this paper). Detailed information on the origins of the project was not included in the paper for the sake of the double-blind review process and page length requirements, but is available upon request from the authors. We thank Editor Elizabeth Rose and the anonymous reviewers for their detailed and constructive feedback. We are also grateful for the preliminary feedback from Editors John Mezias and Bill Newburry, as well as from JIBS Editor Alain Verbeke. We also thank the authors of the 2020 AIB Curriculum Survey (Chuck Kwok, Robert Grosse, Carl Fey, and Marjorie Lyles) for sharing their results with us. This project has been a team effort that would not be possible without the commitment and support of each of the people listed in these acknowledgements. This work has been funded in part by the Robert and Denise DiCenso Professorship and the Center for Emerging Markets at Northeastern University.

About the Authors

Luis Alfonso Dau ( [email protected] ) is an Associate Professor of International Business and Strategy and the Robert and Denise DiCenso Professor at Northeastern University. His research focuses on the effects of institutional processes and changes on the strategy and performance of emerging market firms. He is also a Dunning Visiting Fellow at the University of Reading and a Buckley Visiting Fellow at the University of Leeds. Sjoerd Beugelsdijk ( [email protected] ) is a Professor of International Business at the University of Groningen. He specializes in globalization and comparative cultural analysis. He is the research director of the global economics and management group, and has served as academic director of the undergraduate international business program at the Faculty of Economics and Business in Groningen. He is Reviewing Editor of the Journal of International Business Studies and a Fellow of the Academy of International Business. Maria Tereza Leme Fleury ( [email protected] ) is a Full Professor in the area of International Strategy and former Dean of FGV Sao Paulo Business School. She is the President-Elect and a Fellow of the Academy International Business. She is a Senior Professor at FEA/USP, as well as Dean from 1998 to 2006. Her research is in the areas of International Management, Competence Management, Culture, and Learning. Kendall Roth ( [email protected] ) is Senior Associate Dean for International Programs and Partnerships at the Darla Moore School of Business, University of South Carolina. He holds the J. Willis Cantey Chair of International Business and Economics and is a Fellow of the Academy of International Business. His research focuses on institutional and sociocultural approaches to understanding organization practices and routines within multinational enterprises. Srilata (Sri) Zaheer ( [email protected] ) is the Dean of the Carlson School of Management at the University of Minnesota. She holds the Elmer L. Andersen Chair in Global Corporate Social Responsibility. Her research focus is on international business, a topic on which she has published extensively. She is a Fellow of the Academy of International Business, and a former Consulting Editor of the Journal of International Business Studies.

We see this for instance in the growing trade and investment flows across the globe for the past several decades. Even with the sharp dip in global trade due to the COVID-19 pandemic, UNCTAD projects international trade flows in goods and services of $28 trillion for 2021, which is 23% more than in 2020 and 11% more than at the height of 2018 (UNCTAD , 2021a) . Foreign direct investment (FDI) has been slower to recover from the decline during the pandemic, but UNCTAD projects that FDI levels will soon be higher than before the pandemic (UNCTAD , 2021b) . Relatedly, multinational enterprises (MNEs) are much more important and pervasive in our lives than most people realize. According to the Fortune Global 500 ranking, there are 10 MNEs with annual revenues exceeding a quarter of a trillion dollars (Fortune , 2022) , while more than 150 nations have a lower GDP than that (World Bank , 2022) . Similarly, 13 of these MNEs have more than half a million employees (Fortune , 2022) , which is greater than the population of a number of countries (World Bank , 2022) . We see the ubiquity of IB in the products we buy, as even those labeled as being ‘made in’ one country often are developed with materials and/or labor in or from other parts of the world and by companies with investors across the globe. We see it in global tourism and the increasing cultural interactions this entails. We see it in our consumption of media and entertainment with increasingly global content. Indeed, we are hard pressed to avoid it.

The sample includes AACSB and AIB member schools. In particular, the geographic scope of the 192 respondent schools is as follows: 72 from the US and Canada, 32 from Asia, 51 from Europe, and 37 from other parts of the globe.

The MNE has traditionally been one of the main units of analysis examined in IB, but it is not the only one. IB examines many other units of analysis at different levels, such as business groups, small and medium enterprises (SMEs), cultural diversity in workgroups, bicultural individuals, expatriate managers, and so on. Indeed, the field provides a ‘big tent’ that welcomes researchers interested in a broad range of areas. Future work can extend this article by examining how the 3 Cs framework applies to other units of analysis and areas of interest.

Submitted : August 06, 2021 EDT

Accepted : March 05, 2022 EDT

International Business

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• International Business - A Worldwide Trade

International Business Overview

Manufacturing and trading beyond the boundaries of one’s own country are known as international business. International business is also called international trade. But this is partially true. No doubt, international trade comprises exports and imports of goods. However, the scope of international business has expanded significantly. International trade in services such as international travel and tourism, transportation, telecommunications, banking, warehousing, distribution, and advertising has increased significantly.

Other equally important developments are the increase in foreign investment and the production of goods and services abroad. The World Trade Organisation, established by the governments of various countries, is one of the major contributors to the expansion of intercountry ties and business relations. New methods of communication and the development of faster and more efficient transportation needs have enabled most countries to do their international business efficiently. The international business contributes to the development of both importing and exporting countries, which is why it holds great importance.  

International Business

Concepts of International Business

Some of the important concepts of international business are discussed below:

Merchandise Exports and Imports : Merchandise refers to tangible goods, i.e., the goods that can be seen or touched. Now, if we talk about merchandise exports, it means sending tangible goods abroad. On the other hand, merchandise imports mean buying tangible goods from abroad.

Service Exports and Imports:   Also known as invisible trade, involves the export and import of services. Services included are tourism, transport, communication, marketing etc.

Licensing and Franchising: Licensing is permitting another party in a foreign country to produce and sell goods under the home country's trademark, copyright or patent in lieu of some fees. For example, Pepsi and cola. Franchising is similar to licensing only but is associated with services, e.g., Mcdonald's.

Foreign Investment: Foreign investment refers to the investment of funds in foreign countries in exchange for financial return. 

Importance of International Business

Through international trade, it becomes possible for people to consume goods and services of other countries and improve their standard of living. 

International companies export goods and services around the world. This allows in earning valuable foreign exchange.

When firms get involved in external trade, it increases the firm’s production capacity. Due to the advantage of economies of scale, the cost of production decreases.

International business improves business vision and makes firms more competitive and diversified.

Types of External/International Trade 

Export - It refers to selling goods and services to foreign countries.

Import - It refers to buying of goods and services from foreign countries.

Entrepot (Re-Export) - It refers to the import of goods not for consumption in the home country but for exporting them to another country.

Types of Trade

Benefits of International Business 

The Importance of international business to nations and firms is discussed below:

1. Benefits to Nations  

Earning of Foreign Exchange : It helps a country to earn foreign exchange and can be used to import capital goods, technology etc.

More Efficient Use of Resources: Every country has some resources, e.g., labour resources, technological capabilities, water resources, etc. So, countries can choose the goods they produce efficiently with their own resources and import the rest of the goods. 

Improving Growth Prospects and Employment Potential: Through external trade, countries can increase their production capacity to supply goods to foreign countries.

Increase in the Standard of Living: Through international trade, it becomes possible for people to consume goods and services of other countries and improve their standard of living. 

2. Benefits to Firms 

Prospect for Higher Profit: If prices in the domestic market are low, then firms can sell their products in other countries (International market) where prices are high and can earn higher profit.

Increased Capacity Utilisation: When firms get involved in external trade, it increases the firm’s production capacity. Due to the advantage of economies of scale, the cost of production decreases. 

Prospects for Growth: Firms can enhance or expand their business by approaching the international market.

Decrease Competition: If there is high competition in the domestic market, then companies can sell their products in the international market or in any other country where there is less competition.

Improved Business Vision: It improves business vision and makes firms more competitive and diversified.

Sumit operated a small fireworks production unit. He exported about 70% of his products to the United States. He was associated with relevant government agencies that obtained export licences without following procedures. He was able to avoid paying the necessary excise duty. He hired immature and illiterate people, even children, from nearby huts. He provided poor workers with drugs, rations, and interest-free loans. He hired a teacher to teach the children in the evenings. As the economy grew, demand for the company's products increased by almost 20%. Due to increased profits, he decided to expand his business further. How has international business proved beneficial for companies like Sumit's? Explain.

Ans: International business has the following advantages for companies:

Higher Profit Prospects – Low domestic prices allow companies to make higher profits by shipping their products to high-priced countries. 

Increased Production Capacity – Companies can plan to expand overseas and take orders from foreign companies to take advantage of excess manufacturing capacity and improve operating revenues. Large-scale production creates economies of scale, resulting in lower production costs and higher profit margins per unit.

Growth Prospects – As domestic demand saturates, companies can look to foreign markets where demand is strong and recovering rapidly, especially in developing countries. Businesses can greatly enhance their growth prospects by expanding into foreign markets.

Summary  

The introduction to the international business started with companies increasingly making investments in foreign countries and undertaking the production of goods and services in foreign countries to come closer to foreign customers and serve them more effectively at lower costs. In conclusion, international business is a much broader concept that includes cross-border trade and goods and services production. 

FAQs on International Business - A Worldwide Trade

1. Mention Three Benefits of International Business About The Nation

Benefits of international business about to nations-

Whenever we export anything in the foreign countries, whatever payment is received is always received in the currency of the other, the currency which runs in the other country. It is very important in the development of a nation.

Now we can use resources in a better way, which means that anything that is too much in the country soon will not get wasted. We can export it in another country which was not available there before.

Due to this, the growth of any nation starts, it means that when a lot of countries start business internationally, then the revenue is higher. Due to which, the growth rate of GDP increases along with the number of jobs.

2. How Many Types of International Trade Are There?

There are 3 types of international trade

3) Entrepot

3. What are the Objectives of Export Trade?

The following list contains all the objectives of export trade. Take a look.

For selling surplus goods.

To make better utilisation of resources.

To earn foreign exchange.

To increase national income

To generate employment

To increase government revenues

To create International place and cooperation

4. What do you understand about International business and what is its significance?

The international business is the business with other countries of the world. International trade is when purchasing and selling are not done in India. When purchasing and selling are done outside India. It sometimes is also referred to as a cold trade between two or more countries. International business is divided into three types, that are: Import, Export, Entrepot. International business, also known as international trade or external trade.

5. What is the nature of international business?

The nature of international business is like whenever an international business or trade is done, the involvement of two countries is always involved, no matter what. Only then is the selling and purchasing possible among countries. Whenever you are selling or buying goods or services to other countries, the payment is supposed to be done in their currency, that is the foreign currency only. 

6. What are the restrictions and the legal phases that international business consists of?

There are many restrictions and legal phases in international business-like In some countries or areas, there are a few restrictions to foreign trade and business. Due to this, there are some goods and services that cannot be purchased from that particular country. And the main and most tiresome activity is the purchasing activity. Many legal steps are taken while making payments and everything has to be secured.

7. How do language barriers challenge international business and what are the problems that language barriers create?

As we know the internal business consists of many businesses in many countries. It involves the clear reality that when you manage another country, you will observe a contrast between their language and your language, which makes it hard to impart. In this way, you need to guarantee that you either get familiar with their language well or decide on another way. 

8 . How does India manage the international business on its behalf?

India takes care of all the rules and regulations created for international trade. . It includes the clear reality that when you deal with another country, you will notice a difference between their language and your language, which makes it difficult to bestow. Only one out of every odd country has everything.

9. State the reason for doing international business.

Some of the reasons for doing international business are discussed below:

Unequal distribution of natural resources: Countries cannot produce at the same level of quality and the same cost. This is due to the unequal distribution of natural resources and the differences in productivity levels between different geographic locations.

Multiple Differences: There are differences in labour productivity and manufacturing costs. It varies from country to country due to different socio-economic, geographical, and political factors. 

Price differentials: Due to the difference in product prices, companies are also involved in importing and exporting goods. They import cheaper things from other countries and export goods to other countries where they can get better prices for their products.

Advantages of specialisation: The regional division of labour principle can also be applied internationally. For example, most employable developing countries specialise in manufacturing and exporting garments. 

10. State the difference between export and import. 

Export and Import are widely used in international business. The difference between export and import is discussed below: 

The main difference between importing and exporting is that importing means bringing products or solutions from another country into your country while exporting means marketing goods or solutions from your country of residence to another country. No country has all the resources it needs, so both imports and exports are necessary for a country to exist. Therefore, nations must rely on other nations for the goods and services they lack.

3. Distinguish between Licensing and International Franchising.

The difference between licensing and franchising is discussed below:  

Licensensing is permitting another party in a foreign country to produce and sell goods under the home country’s trademark, copyright or trademark in lieu of some fees. For example, Pepsi and cola. Franchising is similar to licensing only but it is associated with services, e.g., Mcdonald’s. 

Licence agreements are used to monetize brands and technologies through independently operated companies. Franchise agreements are used to grow a brand through outlets that operate under a unified system controlled by the franchisor.

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Why Studying International Business Is Important for Your Career

Global business — and the study of it — has been around for decades, but with the advances in technology in the last 20 years or so, both have skyrocketed. Having skills in international business (and intercultural fluency in general) is vital to moving forward in this increasingly globalized world.

A survey by the National Association of Colleges and Employers (NACE) lists knowledge of global cultures as one of its eight key career competencies. Also, in a survey by the Association of American Colleges & Universities , 53% of employers said the ability to communicate and work with people from different cultural backgrounds is a “very important” skill. That said, many employers think college graduates are not well prepared in this area. This is why studying business on a global scale is vital.

We talked with Pam DeLotell , PhD, associate dean in the Purdue Global School of Business and Information Technology about the importance of global business and the skills you need for a global business career.

“Economic and technological globalization has already happened,” says DeLotell. “What everyone is moving toward now is that cultural connection that allows us all to respect and engage with cultures different than our own.”

Why Is Studying Global Business Important?

Although some of the biggest companies in the world are headquartered in the United States—think Apple, eBay, Google—their operations span the globe. To interact with the places these companies do business, a knowledge of different cultures and how they operate is key to survival in the marketplace.

Under its Equity & Inclusion section, the NACE competency statement lists these activities as some of those indicative of career readiness:

• Demonstrate flexibility by adapting to diverse environments.
• Keep an open mind to diverse ideas and new ways of thinking.
• Seek cross-cultural experiences and interactions globally that enhance one’s understanding of people from different demographic groups and lead to personal growth.
• Solicit and use feedback from multiple cultural perspectives to make inclusive and equity-minded decisions.

“Employers want to know that you are sharpening your global community skills,” says DeLotell. “[And they want to see] that you can interact with others who may have different cultural, social, and economic backgrounds, experiences, or preferences.”

What Skills Are Needed to Be Successful in Global Business?

The skills learned in pursuing a global business degree or certification can be used in many different fields. These top skills are often sought by international companies:

• Adaptive thinking. This skill helps you thrive in an always-changing environment, making you well placed for success.
• Collaboration. Among other qualities, collaboration requires humility, allowing others to take the lead and share credit for success.
• Cross-cultural communication skills. This would require diplomacy, respect, and sensitivity to cultural differences.
• Emotional intelligence. People strong in this skill are self-aware and in control of their emotions, making them better able to react and adapt.
• Excellent networking abilities. This includes developing strong relationships outside of your home country.
• Interpersonal influence. This is the skill of encouraging others to get on board with your ideas because they understand their value.
• Resilience. Working across time zones and cultures involves long hours and unique challenges, which requires mental toughness.

These soft skills can be a true advantage in the global business world.

What Job Titles Can You Have in Global Business?

Knowledge of global business isn’t limited to any one field. With fluency in global issues, you can open up job opportunities in a number of countries to your expertise, and you can do business around the world.

“Although many global positions are skill specific (think accounting or project management), many jobs today rely on emotional intelligence, cultural awareness, and social skills that global citizens build,” says DeLotell. “In today’s business environment, you will interact with other individuals who come from different communities or cultural backgrounds, so all of these skills are going to help you even if you never work in an international or overseas operation.”

What Do You Study in an International Business Degree Plan?

Global business degrees typically focus on competencies, both practical and research-based, to understand the impact of differences in cultural, economic, legal, and political systems.

Purdue Global’s degree programs focus on the following three key areas:

• How to recognize, respect, and strategize with major areas of difference. These differences can be cultural, political, or legal.
• How to understand the strategy of multinational organizations. How organizational design supports the firm's strategic decisions related to primary business functions operating across national borders.
• How to develop entry strategies to successfully move into a foreign market. Consider how an organization can leverage resources, capabilities, and preferential entry modes to create competitive advantages when entering a foreign market.

“Anyone who is working in a diverse environment would benefit from exposure to global business skills,” says DeLotell.

How Does Studying Abroad Help You in Your Global Business Degree?

International internships, training programs, or studying abroad can also provide a helpful way to immerse yourself in global business.

At Purdue Global, both the online MBA with a specialization in global business and the online MS in Management and Leadership with a specialization in global business offer an option to learn abroad, in person or virtually, by working with organizations and scholars outside of the U.S.

“There’s a difference between looking at the theories surrounding global business and discussing those theories versus actually immersing yourself in a culture and visiting a business where those differences are in place,” says DeLotell. “Many of our students never had the chance to study abroad with such a concentrated focus, and Purdue Global makes that possible. There is also an option for a virtual education abroad experience at Purdue Global for students who cannot leave the United States for this type of immersive environment.”

How Purdue Global Can Give You a Global Business Edge

Purdue Global's graduate-level programs in global business are available as concentrations within our online MBA and master’s in management and leadership degree programs and as a graduate micro-credential . A global business elective course, Building Global Competence, is available to all Purdue Global graduate students.

All of these degree concentrations and courses offer you a chance to position yourself for a global future. Purdue Global’s first-ever educational travel abroad experience is also being offered with the master’s programs, both virtually and in person.

Reach out today to learn more about programs at Purdue Global.

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Please note you do not have access to teaching notes, culture studies in international business: paradigmatic shifts.

European Business Review

ISSN : 0955-534X

Article publication date: 11 January 2016

This paper aims to unfold the path of how the complexity of culture issues leads to a rising pressure for paradigm changes in the research on culture in international management. In terms of academic debate about culture, the crucial paradigm shift has not yet happened. Research and writing are still dominated by a mechanistic-rational approach which does not quite know to handle cultural phenomena which by nature are mutuable, often transient and invariably context-specific. Rising pressure is observed for paradigm changes through three main trends: integration of West-East dichotomy, coexistence of convergence and divergence; and dynamic vs static perspectives. It is argued that the unresolved debate on the culture construct and its measurement, the epistemological stance by researchers and associated methodological choices in culture studies reinforce these trends pressuring for a paradigm shift.

Design/methodology/approach

This paper reviews the knowledge based on culture studies to establish the contributions of culture studies in international business and the foundation of its knowledge base. The conceptual foundation of culture, its multi-level and multi-dimensionality and critical issues in research epistemology and methodology are analyzed to discuss emerging trends in the process of an imminent paradigm change.

By unfolding the nature of abstract and high-order definition of culture, the focus is on deciphering the complex construct and multi-level and multi-dimensionality in measurement, which, in turn, interact with the epistemology of culture researchers and the choice of methodology used to carry out culture studies. Eventually the interaction of the three studied elements drives the proposed three paradigmatic changes in the evolving business environment.

Research limitations/implications

The identified trends in existing culture research keep the importance of culture studies in international business management thriving as we point to their relevance for the envisaged paradigm shift.

Practical implications

The three paradoxes discussed challenge researchers who aim to contribute to the knowledge base of culture in international business. In addition, the debate cannot be ignored by international business managers as culture is a key informal institutional driver that influences international business performance.

Originality/value

The review of the knowledge base on culture studies in management contributes to a better understanding of the envisaged paradigmatic shift of the discipline. The debate on the complexity of culture studies is extended to three tendencies for potential paradigmatic change, with implications discussed to suggest future research.

• Paradigm shift
• International business

Acknowledgements

The two authors contribute equally to the manuscript. The authors are indebted to the participants of the EURAM 2013 conference in Istanbul and 2011 International Conference on “Leadership and Management in a Changing World: Lessons from Ancient East and West Philosophy” in Athens for helpful comments on an earlier version of this paper.

Rohlfer, S. and Zhang, Y. (2016), "Culture studies in international business: paradigmatic shifts", European Business Review , Vol. 28 No. 1, pp. 39-62. https://doi.org/10.1108/EBR-07-2015-0070

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Copyright © 2016, Emerald Group Publishing Limited

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Language in International Business: A Review and Agenda for Future Research

• Research Article
• Open access
• Published: 04 July 2017
• Volume 57 , pages 815–854, ( 2017 )

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• Helene Tenzer 1 ,
• Siri Terjesen   ORCID: orcid.org/0000-0002-2070-1942 2 , 3 &
• Anne-Wil Harzing 4  

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A fast growing number of studies demonstrates that language diversity influences almost all management decisions in modern multinational corporations. Whereas no doubt remains about the practical importance of language, the empirical investigation and theoretical conceptualization of its complex and multifaceted effects still presents a substantial challenge. To summarize and evaluate the current state of the literature in a coherent picture informing future research, we systematically review 264 articles on language in international business. We scrutinize the geographic distributions of data, evaluate the field’s achievements to date in terms of theories and methodologies, and summarize core findings by individual, group, firm, and country levels of analysis. For each of these dimensions, we then put forward a future research agenda. We encourage scholars to transcend disciplinary boundaries and to draw on, integrate, and test a variety of theories from disciplines such as psychology, linguistics, and neuroscience to gain a more profound understanding of language in international business. We advocate more multi-level studies and cross-national research collaborations and suggest greater attention to potential new data sources and means of analysis.

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1 Introduction

Exactly 30 years ago, a review of nearly 500 English-language management texts (Holden 1987 ) demonstrated that only very few authors considered language, and those who did quickly brushed over the topic without considering its complexity. Much has changed since that time. Today’s international business scholars treat language as an issue at the heart of their subject area (Brannen et al. 2014 ; Mughan 2015 ), as language determines organizational communication, constitutes the foundation of knowledge creation (Piekkari et al. 2005 ) and is considered essential for the construction of organizational realities (Piekkari and Tietze 2011 ). Highlighting the theoretical and practical relevance of language in international business, Piekkari et al. ( 2014 , p. 1) stated: “To say that language permeates every facet of international business would meet with little argument, especially from those involved in global activities in any form”.

As noted by Brannen et al. ( 2014 ), scholars approach language issues in business from many different angles. Among the diverse conceptualizations of language they use, three facets feature most prominently: national languages spoken in multinational corporations (MNCs), officially mandated corporate languages, and English as the language of global business. Many scholars focus on the national languages of corporate headquarters and globally dispersed subsidiaries, which are spoken alongside each other in MNCs (Angouri 2014 ), mingle in employees’ speech (Janssens and Steyaert 2014 ), and thus form “linguascapes” (Steyaert et al. 2011 ), which are constantly subject to negotiation. Others deal with the notion of a common corporate language, mostly defined as an “administrative managerial tool” (Latukha et al. 2016 ) that acts as a facilitator or barrier to internal and external communication (Piekkari et al. 2005 ). Beyond the frequent, but simplistic understanding of top management mandating that a specific national tongue (mostly English) must always be chosen (Berthoud et al. 2015 ), scholars have started to recognize the complexities of common corporate languages, which “often reflect the industry context and the national language environment in the country of origin” (Brannen et al. 2014 , p. 497; Brannen and Doz 2012 ). The role of English constitutes the third facet of language frequently studied in business. Depending on their disciplinary socialization, international business scholars varyingly conceptualize English as a hegemonic force (Tietze and Dick 2013 ), which recreates postcolonial power structures (Boussebaa et al. 2014 ) or as a more neutral communicative tool in the form of business English as a lingua franca Footnote 1 (BELF) (Kankaanranta and Planken 2010 ). Yet other scholars investigate the interplay between national and corporate languages and English (Kuznetsov and Kuznetsova 2014 ). Language-related research in economics developed largely separate from those bodies of literature. This economic stream analyzes semantic structures of national languages such as future-time reference (Chen 2013 ) or gender marking (Hicks et al. 2015 ) and investigates their impact of economic behavior at the country level. Cross-national economic research mostly relies on linguistic distance, i.e. a measure of how difficult speakers of one language find it to learn the other (Hutchinson 2005 ), or as a predictor of trade patterns and various other outcomes (Sauter 2012 ; Melitz and Toubal 2014 ).

But has the proliferation of publications studying international business activities under a language lens made scholars more sophisticated in their conceptualization of language? We review the fast-growing literature on language diversity in international business in order to consolidate and evaluate its achievements to date, identify remaining desiderata, and suggest a research agenda for the years to come. Based on our reading of 264 journal articles on language issues in international business contexts, we show that different streams within the field have developed separately. Whilst economic approaches strive to make the features of specific languages measurable, business studies are divided in their conceptualizations of languages as static and discrete entities versus hybrid, fluid, and situational codes. Whereas some business studies perpetuate the notion of language as an easily accessible instrument or management tool, an increasing number of publications on multilingual business phenomena draws on translation studies, socio- and psycholinguistics to capture language as a multifaceted, complex, and dynamic concept. Revealing patterns in theory, methodology, data, and content within the extant literature, we conclude that international business as a subject area has substantially broadened and deepened its coverage of language issues, but would still benefit from drawing more extensively on language-focused disciplines such as linguistics, in particular applied linguistics, sociolinguistics, and psycholinguistics, as well as translation and communication studies. Only by integrating the concepts and methods from different academic disciplines can the complexity of linguistic influences on international business be adequately understood. Building on this finding, our review aims to provide an inspiring and actionable agenda for future research.

We will start by describing our systematic review methodology and show how we identified, selected, and reviewed relevant publications. Subsequently, we will develop an organizing framework through which we summarize the current status of research in language in international business by research setting, theories, methodologies, and key findings at individual, group, firm, and country levels. On this basis, the second half of our review develops a future research agenda.

2 Methodology: Systematic Literature Review

2.1 data collection and analysis.

We followed the systematic literature review methodology (Tranfield et al. 2003 ) using Business Source Premier, JSTOR, and ProQuest to identify language-related research in international business. Following Cantwell and Brannen’s ( 2011 ) positioning of the Journal of International Business Studies , we conceive of international business as a subject area covering contributions from a variety of business disciplines such as management, human resources, or marketing and other disciplines such as economics, psychology, and (in the specific case of our topic) linguistics. Footnote 2 These multidisciplinary contributions are united by their focus on the MNC with its cross-border activities, strategies, business processes, organizational forms, and other ramifications as a common subject matter. Regarding our specific topic, language-related publications written by management scholars, linguists, communication scholars, or members of other disciplines are equally classified as international business contributions as long as they study language in a business context.

To capture relevant publications in this subject area, we searched for the terms language, linguist*, bilingual, and multilingual, each time combined with the term “international business” (i.e. “language” AND “international business”, “linguist*” AND “international business”, etc.). “International” is the broadest term describing cross-border studies, whereas “business” is broader than other possible search terms such as enterprise, corporation, or management. Our results were particularly comprehensive, as the search engines not only crawled for the full term in the article texts, but also yielded publications using “international” and “business” separately (EBSCO 2017 ). To probe for comprehensiveness, we ran several test searches combining alternative terms such as “multinational”, “transnational”, and “cross-border” with “enterprise”, “corporation”, and “management”. Our core searches covered the results of these probe queries with extremely few exceptions.

These searches led us to a variety of publications in a broad set of journals. Our review starts in 1987 with the earliest publications we identified and continues until December 31, 2016, thus spanning three decades. Our sample comprises work that is already in the public domain, i.e. has been published or appeared online first on a journal website, but excludes forthcoming articles. We omitted monographs and book chapters, as these publications are not listed in the databases we searched and could therefore not be systematically gathered. We also omitted book or thesis reviews, as well as introductions to special issues as they do not include original research. We only included publications which had one of our search terms in the abstract, keywords, or hypotheses. Furthermore, we discarded those which only considered language as one out of many independent or moderator variables, unless this variable was discussed separately in the results and discussion section and unless the related results yielded theoretical implications. To further delineate the scope of our review, we focused on publications dealing with diversity in national or corporate languages, with English as a global language or with the dynamic interplay between these aspects. We omitted studies of rhetorical (see e.g., Fiol 2002 ), metaphorical (see e.g., Cornelissen 2012 ), or symbolic (see e.g., Astley and Zammuto 1992 ) language use, which do not focus on the effects of language diversity, but rather on the representations of language. We also excluded communication research dealing with discourse, narratives and sensemaking rather than multiple and different languages per se (see e.g., Cooren et al. 2011 ).

We initially identified 390 articles, of which 264 met the criteria for inclusion outlined above. The “ Appendix ” lists the final set of references, which we coded in an Excel spreadsheet according to a broad range of criteria including, among others, theoretical approaches, levels of analysis, empirical methods (if applicable), major findings, and future research suggestions. Having jointly coded the first ten papers, we noticed very large inter-coder agreement, so we proceeded to code independently with regular crosschecking.

2.2 Overview of Our Sample

Since the earliest articles were published in 1987, language-related research in international business has grown exponentially. There were only 14 articles published from 1987–1999, 73 published 2000–2009, and 177 published 2010–present. We visualize this development in Fig.  1 . Whereas prior studies frequently emphasized the “infancy” of language-related international business research (see e.g., Feely and Harzing 2002 ; Neeley 2013 ), there has been a dramatic increase in research output over the past decade.

Language research in international business: article types by year. Note: 2016 figures include articles that appeared online first in 2016, to be published in print in 2017

For each of the 264 publications in our sample, we verified its number of Google Scholar citations. Footnote 3 The field’s slow start is reflected in the low number of citations most of the earliest publications have garnered to date (Holden 1987 : 29; San Antonio 1987 : 71; Fixman 1990 : 129; Swift 1991 : 81; Tsalikis et al. 1992 : 37; Sims and Guice 1992 : 25). In this respect, Marschan-Piekkari’s early publications (Marschan et al. 1997 : 335; Marschan-Piekkari et al. 1999a : 206, 1999b : 410) marked an influential turning point, which was followed by an ever increasing growth of the field.

The early marginalization of language research in international business also becomes evident in publication outlets. Until a decade ago, most language research had appeared in fairly specialized journals with only occasional publications in more mainstream International Business journals such as International Business Review , Journal of World Business , and Management International Review . Only international marketing and consumer behavior have seen a relatively early attention to the topic of language in its top journals, with a 1994 publication in Journal of Consumer Research and three further publications in Journal of Consumer Research and Journal of Marketing between 2005–2010, all focusing on linguistics in advertising. Even between 2005 and 2010, just two publications on language topics appeared in respectively a top Management ( Journal of Management Studies ) and International Business journal ( Journal of International Business Studies ). It isn’t until the last 5 years that the topic seems to have acquired mainstream legitimacy and we see regular publications in top journals such as American Economic Review , Academy of Management Journal , Academy of Management Learning and Education , Journal of International Business Studies , Journal of Organizational Behavior , Journal of Management , Journal of Management Studies , Leadership Quarterly , Organization Science , and Psychological Science .

3 Current Status of Language Research in International Business

As most of the journal articles in our review follow a conventional sequence of presentation—i.e. background, theory, methods, and research findings—we organize our literature overview into similar categories. Our structure also mirrors the choices of other recent systematic reviews (see e.g., Aguinis and Glavas 2012 ; Terjesen et al. 2016 ). We will start by reporting on the geographic settings of language-related international business research reflecting the fact that most papers open with presenting their studies’ background. Based on a review of theoretical framework sections, we will then discuss key theories used in the field. Drawing on the methods sections of our sample papers, we will go on to discuss frequently used methods and data sources in our focal field. Finally, we will mirror the results sections of empirical papers by providing an overview of their findings. As it is difficult to cluster the highly fragmented content around “big” research questions, we will build on Brannen et al.’s ( 2014 ) characterization of language as a “multilevel construct” and categorize findings according to the corresponding levels of analysis. Table  1 summarizes the aspects covered in our review.

3.1 Research Setting

Much of the early research originates from outside the US. Although ten out of seventeen authors of the 14 articles published between 1987 and 1999 were from US business schools, this is only due to their large author teams. Language scholars from Finnish and Norwegian institutions published more prolifically, producing several papers per author. The United Kingdom is the most frequently studied country in these early works. This strong representation of European countries is rather atypical for the otherwise very US-centered international business research. Harzing and Feely ( 2008 , p. 51) explain this pattern with the fact that “American researchers (…), because of the dominance of the English language, have a reduced perception of the importance of language”. Although US scholars have caught on to the topic in recent years, author origins and target regions for empirical studies on language are still more diverse than other fields within the broader subject area of international business. In the overall sample ranging from 1987–2016, the number of countries examined ranges from 1 to 224, with a mean of 8, a median of 2, and a mode of 1. The most common countries examined to date are the UK, USA, Finland, Germany, Japan, and Sweden. Compared to China, there is a paucity of language research related to the other BRIC and emerging economies.

Having discussed the development in the geographic centers of language-sensitive international business research, we now turn to the theoretical background of publications. Depending on their disciplinary socialization, international business scholars with an interest in language draw on a variety of theories from organizational behavior, economics, and strategy. Organizational behavior and cross-cultural management scholars approach language with theories on culture (e.g., Harzing et al. 2002 ; Kassis Henderson 2005 ), social identity (e.g., Groot 2012 ; Reiche et al. 2015 ), power relations (e.g., Neeley 2013 ; Hinds et al. 2014 ), emotions (e.g., Neeley et al. 2012 ; Tenzer and Pudelko 2015 ), and a range of other phenomena. Those with a background in economics apply, among others, the gravity model of trade (e.g., Melitz and Toubal 2014 ; Sauter 2012 ), transaction cost economics (e.g., Selmier and Oh 2013 ), or linguistic relativity (e.g., Chen 2013 ). Strategy researchers focus predominantly on resource-based explanations for the internationalization of MNCs and new ventures (e.g., Fernandez-Ortiz and Lombardo 2009 ; Hurmerinta et al. 2015 ). Despite their common goal—to explain the impact of language on international business and economic activities—these bodies of literature have hitherto only spoken to each other to a very limited extent. To broaden international business scholars’ view beyond their respective home disciplines, we will now summarize the key contributions of the most utilized theories in language-related international business research in order of their frequency of use: culture, the gravity model, internationalization, linguistic relativity, and social identity.

3.2.1 Culture

Ever since language first emerged as a topic in international business, the relationship between language and culture has challenged international business researchers. No one has doubted the tight link between the two concepts, but their relationship has been conceptualized disparately. Early international business research often conflated language with culture (Kassis Henderson 2005 ) or implied that cultural modeling based on value systems substituted for specific language studies, a stance that may have delayed the recognition of language as a separate construct (Brannen and Mughan 2016 ). Gradually, however, the mutual relationship between language and culture came to the forefront, with some authors considering language to be “inherent in a specific culture and also an embodiment of it” (Welch and Welch 2008 , p. 341) and others positioning it at the center of culture (Vaara et al. 2005 ).

In recent years, management scholars (e.g., Harzing et al. 2005 ; Akkermans et al. 2010 ) have applied the psychological concept of cultural accommodation to capture the link between language and culture in a business context. Showing that language priming induces individuals to adapt their thoughts and behaviors to the cultural norms associated with the language they are currently speaking, those authors demonstrate that language use activates what the neuroscience literature identifies as the neural pathways resulting from engagement in cultural practices. Along these lines, Dutch students were found to behave more competitively when playing a price-setting game in English compared to their native language (Akkermans et al. 2010 ), especially if they had spent time in an Anglophone culture.

International business researchers taking inspiration from sociolinguistics have approached the culture-specific elements of language use from a different angle. Building on cross-cultural pragmatics , they analyze the culture-specific rhetoric patterns in speech acts such as requesting, refusing, and thanking to understand how speakers of different cultures use language in interactive contexts to create specific meaning (Kassis Henderson 2005 ). As this implied meaning was found to create frequent misunderstandings in global business communication (Chen et al. 2006 ), an increasing number of scholars recognized the “transformative power of translation” (Brannen et al. 2014 , p. 501). Analyzing the difficulty of translating Western management terms such as “knowledge sharing” into Russian, Holden and Michailova ( 2014 ) caution against simplistic attempts to replace terms from one tongue with those of another. Following their call, international business researchers have begun to understand translation as a process of interaction across cultures (Brannen and Mughan 2016 ; Chidlow et al. 2014 ), where meaning may be found in the space between cultures.

3.2.2 Gravity Model of Trade

The second most frequently applied theory is based on the gravity model of trade, which correlates the direction and size of trade between political entities with the size and geographic distance between these trading partners. Largely separated from other streams covered in this review, economists started in the early 2000s to extend this work to consider the role of language variation as a barrier to bilateral trade. Initial work relied on binary variables to indicate whether or not countries share an official language, whereas later studies have considered the distance between language families, the role of minority languages (Sauter 2012 ), and differences in translation or direct communication (Melitz 2008 ; Melitz and Toubal 2014 ). Controlling for the stock of immigrants and other factors, a consistent finding around the world is that greater distance between/amongst languages is associated with less trade across these nations. As summarized by Sauter ( 2012 ), countries with a common language trade 1.5 times more and the language barrier amounts to a tax equivalent of about 7%, while Egger and Lassman’s ( 2015 ) meta-analysis suggests that a common language increases trade flows by 44%. Related research demonstrates that language is a barrier to trade across Canadian provinces (Sauter 2012 ), 36 countries (Hutchinson 2005 ), and a 19 language, 195-country dataset (Melitz and Toubal 2014 ).

3.2.3 Linguistic Influences on MNC and New Venture Internationalization

Strategy scholars concerned with internationalization theories composed the third most prominent theoretical approach to language in business. Inspired by Johanson and Vahlne’s ( 1977 ) seminal model of firms’ internationalization process, which positions language diversity as an important element of psychic distance, scholars have examined how corporate decision makers’ foreign language skills influence their international opportunity recognition (Hurmerinta et al. 2015 ). As a consequence, small to medium-sized enterprises (SMEs)’ directors’ knowledge of a foreign language and international experience is significantly and positively correlated to SMEs’ international diversification strategies (Fernandez-Ortiz and Lombardo 2009 ). Compared to native-born, monolingual Americans, immigrant and transnational entrepreneurs are more likely to start export-oriented businesses; however, language does not affect global imports (Light et al. 2002 ). More than a decade later, a study of immigrant entrepreneurs reports similar findings: Canada’s French and Allophone speakers are more likely to start ventures that export to global markets (Sui et al. 2015 ).

3.2.4 Linguistic Relativity

Linguistic relativity theory, the fourth most frequently applied approach in our sample, rests on the idea that different languages shape different worlds, a premise attributed to linguists and anthropologists (Sapir 1921 , 1951 ; Whorf 1956 ; von Humboldt 1836 ) who examine how different languages’ semantic structures shape human cognition. After being virtually discarded in the 1970s, this theory has recently attracted renewed interest from researchers. An emerging body of research examines the Sapir/Whorf hypothesis in relation to consumer behavior (Puntoni et al. 2009 ) and economic activity (Chen 2013 ). For example, the presence of gender-differentiated pronouns is correlated with attitudes towards gender-based discrimination. Hicks et al.’s ( 2015 ) study of US immigrants show that households where members come from countries with gender-intensive languages are more likely to allocate household tasks by sex, whereas countries with a lack of gender markers in their language have higher female board representation (Santacreu-Vasut et al. 2014 ). Malul et al. ( 2016 ) demonstrate that the linguistic gender marking gap between an MNC’s home and host country influences the success of female expatriates. Chen ( 2013 ) examines the linguistic structure of future tense, finding that native speakers of languages that grammatically associate the future and the present (e.g., French, English, Czech) are more likely than weak future language speakers to display future-oriented behavior such as greater savings, more wealth at retirement, less smoking, greater safe sex, and less obesity.

3.2.5 Language-Based Social Identity Formation

The fifth most frequently applied theoretical approach to language in international business draws on early research in organizational psychology. Leveraging social identity and self-categorization theories (Tajfel and Turner 1979 ), international organizational behavior scholars explain why language diversity can separate employees into groups based on a shared language and thus give rise to language boundaries in MNCs (Born and Peltokorpi 2010 ). As the use of specific language nuances signals a sense of familiarity (Chong et al. 2010 ), language-based clusters form within the MNC based on homophily, a tendency to interact with similar others (Mäkelä et al. 2007 ). These clusters unite employees sharing a common mother tongue who can easily create and maintain interpersonal relationships and exchange knowledge (Fredriksson et al. 2006 ). In contrast, language differences separate expatriates as out-group members from host country nationals, thus diminishing social support, interactions, and network building (Zhang and Peltokorpi 2015 ). Consequently, language emerges as a key factor for self-categorization and the categorization of others (Feely and Harzing 2003 ). These language-based intergroup boundaries can have detrimental effects of decreasing MNCs’ organizational identity, knowledge transfer, control, coordination, and communication (Born and Peltokorpi 2010 ).

3.3 Methodology

In the following, we will examine which methods were most frequently used for studying language in international business. We will also review the data sources empirical studies have been drawing on.

3.3.1 Methods

The heritage of the pioneering qualitative work by Piekkari (Marschan et al. 1997 ; Marschan-Piekkari et al. 1999a , b ) is still reflected today in a large proportion of qualitative case-study research—certainly much higher than in other fields within international business. Figure  1 provides the breakdown of qualitative, quantitative, and theoretical/conceptual research over time. In our sample, 127 (47.9%) studies are qualitative in nature, while 113 (42.6%) use quantitative methods, 11 (4.2%) use both methodologies, and 13 (4.9%) are theoretical/conceptual. Among the qualitative studies, researchers employ a variety of methods, from organizational ethnography to grounded theory and discourse analysis. Of the quantitative articles, a large majority use purely descriptive statistics. The next most utilized methods are regression analyses.

3.3.2 Data Sources

Scholars have utilized a variety of data sources, from interviews and observations to survey data, from multilingual managers from a single or multiple countries to multi-country/language studies. Of the studies that provide a time frame for data collection, the majority are cross-sectional. The few longitudinal studies are a relatively recent development.

Of the studies with data, surveys and questionnaires represent the most common data source, followed by interviews and interviews with supplemental data. Other popular data collection means include online search and other options such as firms’ e-mails, internal documents, and website content, institutional archives and databases, in-house/laboratory experiments/tests, press/census, and participant observations.

3.4 Findings by Levels of Analysis

Over the last three decades, the number of topics covered by language-related research in international business has proliferated along with the fast growth in publications. Following Brannen et al.’s ( 2014 ) portrayal of language as a “multilevel construct”, we organize our review of research findings according to their levels of analysis. The most common level in our sample is individual, followed by firm, and then group and country levels. Approximately 17% of studies include multiple levels of analysis, most commonly the combination of individual and firm levels. Below we summarize major research topics at each level of analysis. Table  2 lists some representative recent publications in these categories and provides some examples of theories, phenomena, and research questions, which language-sensitive international business studies have addressed at each level.

3.4.1 Individual Level Perspectives

Language research at the individual level incorporates multiple perspectives and covers a variety of topics. From an economic perspective, Gary Becker’s ( 1992 ) notion of the importance of human capital is apparent in the large body of research that consistently indicates that one’s language abilities (when one is operating in a ‘host’/non-native environment, i.e., as an immigrant) condition access to information and labor market opportunities. In a multinational firm setting, language skills influence the cross-cultural adjustment of expatriates (Selmer and Lauring 2015 ; Zhang and Peltokorpi 2015 ) and individual employees’ career mobility (Itani et al. 2015 ; Latukha et al. 2016 ). Moreover, multilingual employees find it easier to create social capital (Barner-Rasmussen et al. 2014 ), enabling them to function as boundary spanners, language nodes, and information gatekeepers (Heikkilä and Smale 2011 ; Peltokorpi and Vaara 2012 ). Furthermore, individuals who are bilingual and bicultural in their ability to navigate institutional environments are more likely to pursue entrepreneurial activity, often as transnational entrepreneurs (Light et al. 2002 ). A small but growing body of research (e.g., Luna et al. 2008 ; Brown and Sachdev 2009 ; Alvarez et al. 2017 ) examines the impact of bilingualism on individual outcomes, such as self-sufficiency or perceived vitality. Other research studies the adverse impact of the lack of native English-language skills. For example, Hosoda et al. ( 2012 ) examined the discrimination against potential job applicants with Spanish-accented English in hiring and promotion processes. Scholars have also established that a lack of understanding due to foreign language use creates uncertainty with resulting feelings of uncertainty, anxiety, and tension (Neeley et al. 2012 ; Tenzer and Pudelko 2015 ) which can spill over to other contexts and lead to general feelings of negativity and a fear of exploitation. Again others look at the impact of language choice in bilingual advertising on individual consumers (e.g., Ying-Ching and Wang 2016 ; Kubat and Swaminathan 2015 ).

3.4.2 Group Level Perspectives

As early research viewed language exclusively as a skill residing in individuals, international business studies only gradually recognized it as “a constitutive, collective force contained in the MNC” (Brannen et al. 2014 , p. 499) and started to explore language at higher levels of analysis. At the group level, existing work investigates a diversity of settings from co-located teams (Tenzer et al. 2014 ) to global virtual work groups (Klitmøller et al. 2015 ) and corporate boards (Piekkari et al. 2015 ). For example, recent work examines the impact of linguistic diversity on team processes and emergent states such as group cohesiveness (Lauring and Selmer 2010 ), social categorization (Klitmøller et al. 2015 ), power relations (Tenzer and Pudelko 2017 ) and trust formation between team members (Kassis Henderson 2005 ; Tenzer et al. 2014 ). Dotan-Eliaz et al. ( 2009 ) examine the effects of linguistic ostracism in multilingual groups on coworker attraction, felt rejection and anger, creative performance, and perceived team potency. Other studies investigate language-based choice of communication media in virtual teamwork (Klitmøller and Lauring 2013 ; Klitmøller et al. 2015 ) and language-related status evaluations (Butler 2011 ; Neeley 2013 ). At the corporate board level, language diversity can lead to impoverished and silenced discussions, particularly if employee representatives lack sufficient proficiency in the board’s working language (Piekkari et al. 2015 ).

3.4.3 Firm Level Perspectives

Firm-level research focuses on language competencies, policies, and practices within MNCs (e.g., Harzing and Pudelko 2013 ), including HQ-subsidiary relationships (Harzing et al. 2011 ; Harzing and Pudelko 2014 ) and mergers, acquisitions, and alliances (Joshi and Lahiri 2014 ; Cuypers et al. 2015 ). These studies investigate the impact of linguistic diversity on social identity formation (e.g. Mäkelä et al. 2007 ; Harzing and Feely 2008 ), subgroup dynamics (Steyaert et al. 2011 ), and knowledge sharing (Reiche et al. 2015 ). The latter study, for instance, finds that the positive relationship between a shared language and knowledge transfer is mediated by how much subsidiary managers share the goals and visions of HQ. Cuypers et al. ( 2015 ) find that linguistic distance is linked negatively and lingua franca proficiency is linked positively with higher stakes in acquisition targets.

3.4.4 Country Level Perspectives

Research at the country level highlights the role of language as an institution that shapes behavior and activity. Intra -country research frequently characterizes countries according to their official language(s); some detailed work investigates the languages a country’s citizens speak, for example using the World Values Survey data (WVS 2014 ). Luiz ( 2015 ), for example, draws on the South African context to develop a new measure, ethno-linguistic fractionalization, of a nation’s ethnic and/or linguistic diversity. Much of the research carried out in Switzerland (e.g., Steyaert et al. 2011 , Berthoud et al. 2013 , 2015 ) and Finland (e.g., Vaara et al. 2005 ; Barner-Rasmussen and Aarnio 2011 ) explicitly engages with language dynamics in countries with more than one official language. Inter -country research examines the linguistic distance between national languages or between English as a global language and specific countries’ official languages to determine the language costs of economic transactions (Selmier and Oh 2012 ) and their effect on bilateral trade (Hutchinson 2005 ) or the choice of target countries for foreign direct investment (Lien et al. 2012 ). A recent paper develops a measure to capture the aggregate impact of common native language, common spoken language, common official language, and linguistic proximity on bilateral trade, disentangles ease of communication from other trade enabling factors and additionally considers translators and interpreters’ roles (Melitz and Toubal 2014 ).

3.4.5 Multiple Level Perspectives

Whereas the large majority of language-related studies in international business focus on a single level of analysis, a growing body of research recognizes that language “is a multi-level issue” (Piekkari et al. 2014 , p. 244; Brannen et al. 2014 ). Equally split between qualitative and quantitative approaches, this stream investigates the impact of individual experiences with language on group dynamics and firm performance or explores influences of language issues at higher levels on individual cognitions, emotions, and behavior. However, only a few studies have implemented genuinely multi-level designs, which integrate data collection and analysis at several levels with theory building or testing spanning the same levels (Hitt et al. 2007 ). Studying bottom-up influences, Hinds et al. ( 2014 ) apply an exemplary multilevel approach, which combines individual-level interviews with team-level observation in multinational work groups. The authors analyze these datasets separately and on this basis demonstrate that asymmetries in individual team members’ language proficiency levels lead to subgroup formation and team-level power contests. Research spanning the individual and firm levels explores the implications of individual and corporate translation behavior on an organization’s absorptive capacity (Piekkari et al. 2013 ) or shows how the language capital of individual employees interacts with organizational resources to shape a corporations language operative capacity (Welch and Welch 2015 ). Exploring top-down effects, Boussebaa et al. ( 2014 ) demonstrate how corporate mandates to use English created a transnational language-based hierarchy between different employee groups. Other studies look at the emotional experiences (Neeley et al. 2012 ) or knowledge sharing activities (Mäkelä et al. 2007 ) of employees under a language mandate.

4 Future Research Agenda

Despite the fast growth of language research in international business over the past few years, the field is still far from achieving a holistic understanding of the multidimensional role of language in business. Only a few years ago, Brannen, et al. ( 2012 , p. 1) remarked that “IB research remains unsophisticated in appreciating the multiple forms, facets, and features of language and its impact on MNCs and on the way in which we study IB phenomena”. Taking stock of recent developments, our literature review has shown some progress in this regard, but also revealed that large gaps remain. A juxtaposition of the earliest and latest papers included in our sample illustrates this noticeable, but slow growth. In the years following Holden’s ( 1987 , p. 236) critique of the “naive, misinformed and unconsciously (or unashamedly) chauvinistic” pronouncements on the nature and functions of language in international business, most authors viewed language as “mechanical and manageable” (Fixman 1990 , p. 25), simplistically focused on grammatical errors of non-native speakers (Sims and Guice 1992 ), or characterized accented speech as a fixed personal characteristic (Tsalikis et al. 1992 ). However, others already considered the social and cognitive dimensions of language (Swift 1991 ) and the unintended consequences of corporate language policies (San Antonio 1987 ) in those early days. We still see a varied picture today. On the one hand, scholars increasingly acknowledge the manifold languages spoken in MNCs (Tenzer and Pudelko 2017 ), study instances of language mixing (Schau et al. 2017 ), explore speakers’ linguistic positioning behavior (Millot 2017 ), and generally recognize the contextually conditioned, co-constructed, and culturally created nature of language (Du-Babcock and Tanaka 2017 ). On the other hand, natural languages are still often used as categorical variables, suggesting they are self-contained (Bell and Puzakova 2017 ; Touchstone et al. 2017 ).

Given the multidisciplinary nature of international business as a subject area, we hope that future studies will integrate concepts and methods from different academic disciplines to gain a deeper understanding of the complex linguistic influences on globalized business environments. To stimulate the field’s further development in this direction, we will now point out untapped opportunities for future research. Consistent with the structure of our review above, which follows the conventional sequence of presentation in empirical papers, we highlight promising future research directions for (1) the geographic settings of language research, (2) theoretical approaches from different disciplines, (3) methods and data, and (4) findings on different levels of analysis.

4.1 Research Settings: Future Directions

Having shown an imbalance in authors’ target regions of research, our review suggests that the field would benefit from extending the scope of investigated regions, countries, and languages. Whereas many general effects of language diversity were confirmed across contexts, others may be subject to regional variation. Considering that Harzing and Pudelko ( 2013 ) reported considerable variations in corporate language policies across countries, a more comprehensive coverage is needed, for example of emerging market multinationals. Corporations and individual employees may also face different situations in host countries with multiple official languages (such as Serbia or Singapore), where speakers may mobilize a broad array of linguistic resources to express voice (Janssens and Steyaert 2014 ). Harzing ( 2016 ) tentatively suggests that people of Nordic and Germanic countries tend to perceive language more mechanically as a means of communication, whereas the inhabitants of Latin and East Asian countries consider it to be at the very core of their culture. The latter are hitherto underrepresented, as the current research focuses on Finland, Germany, the UK, and the US. This may be one reason why many international business scholars have understood translation as the mere search for “equivalence” rather than a process of interaction across cultures (Chidlow et al. 2014 ).

Given the varying linguistic distance of local tongues to English (Hutchinson 2005 ) as the language of global business, our review also encourages a more comprehensive coverage of influential languages in global business. In a recent study, Ly et al. ( 2013 ) list Arabic, English, French, German, Hindi, Japanese, Mandarin Chinese, Portuguese, Russian, and Spanish as the ten most influential languages on a global scale. Considering the growing importance of BRIC countries, languages such as Chinese, Russian, and Portuguese are now significant in the global arena. Whereas our review uncovered a growing number of studies on the use of Chinese in business, there is much less research on the languages of the other emerging BRIC countries. Researchers speaking Portuguese, Russian, Hindi, or Tamil as their mother tongues could enrich the field with an intimate understanding of these languages in their native context. Resting on empirical data collected in Finland, China and Russia by native speakers of Finnish, Swedish, English, Russian, Mandarin and Cantonese, Barner-Rasmussen et al. ( 2014 )’s study on multinational boundary spanning demonstrates the enormous potential of such endeavors.

In parallel, European and North American international business scholars should go beyond the dominant domestic collaborations and aim for more international and cross-lingual cooperation with colleagues in emerging economies. They may activate collaborative relationships of this kind through conferences or mailing lists and develop them using virtual collaboration technologies such as Skype, Lync, or WebEx. Selecting languages, countries, and regions based on theoretical considerations, these international research teams could juxtapose different language combinations in one study, thus extending recent comparisons of language issues in MNCs in Nordic, Anglo, continental European, and Asian language clusters (Harzing and Pudelko 2013 ). Empirical projects of this scale and scope are particularly challenging to plan and carry out, as they require scholars to carefully reflect upon their methodological practices (Piekkari and Tietze 2011 ). Along these lines, Welch and Piekkari ( 2006 ) illustrate the difficulties of reaching shared understanding with interviewees when using foreign languages in qualitative interviewing. Chidlow et al. ( 2014 ) provide helpful guidance how international business researchers can responsibly account for their translation decisions when managing multilingual datasets.

4.2 Theory: Future Directions

As we have shown above, theoretical perspectives such as culture, the gravity model from economics, theories of firm internationalization, linguistic relativity, and social identity currently prevail among language research in international business. Consistent with Brannen et al.’s ( 2012 ) call for a “reexamination of current international business models and frameworks” under a linguistic lens, we believe that research on language diversity in international business should build on extant achievements, but also extend its theoretical scope beyond the approaches used by previous studies. To this end, organizational behavior researchers, strategy scholars or economic theorists need to look beyond the boundaries of their academic socialization. Whereas individual researchers can gain inspiration from other disciplines by way of cross-disciplinary pollination, we see the largest potential for advancement in inter-disciplinary collaboration by representatives with different academic socialization. The innovation resulting from this creative recombination of theoretical angles will help the field overcome lingering simplistic uses of the language concept and approach its focal phenomenon in ways that are more sophisticated.

4.2.1 Building on Existing Theories

There are many promising opportunities to enrich the dominant theoretical angles in the field. In terms of culture, we second Pudelko et al.’s ( 2015 ) call for a better clarification of the relationship between culture and language. Researchers can build on the pioneering publications about cross-cultural speech pragmatics in international business settings (Chen et al. 2006 ; Kassis Henderson 2005 ). Going beyond the readily detected issues with lexical and syntactical understanding across language barriers, sociolinguistic speech act theory (e.g., Pütz and Neff-van Aertselear 2008 ) may help to examine the impact of culturally conditioned language use (House 1996 ; Wierzbicka 2003 ) on international business communication. Differences in the use of language for particular purposes such as informing, demanding, or promising, and diverse conversation styles, e.g. in turn-taking or intonation, merit particular attention, as these forms of language barriers “often go unnoticed and are all the more pernicious for that reason” (Kassis Henderson 2005 , p. 70).

Building on Egger and Toubal’s ( 2016 ) suggestions to refine research on language and trade, economic perspectives using the gravity model could be extended to examine the effects of immigration, transnational entrepreneurship, and a country’s foreign language education on trade activity. Such endeavors may follow up works by Genc et al. ( 2012 ), Drori et al. ( 2009 ), and Byram ( 2008 ), respectively. The related research into linguistic influences on MNC internationalization could examine the role of language policy on firm outcomes, for example investigating how policies to use English as the corporate language affect firm growth and international expansion. This line of work could answer calls (e.g., Allen et al. 2015 ) to better understand how MNCs manage human capital across borders.

Linguistic relativity theory can be applied to new topics such as cognitive theories of decision-making (Wood and Bandura 1989 ) and the related cross-cultural differences (Mann et al. 1998 ) or gendered structures of the workplace (Holmes 2008 ) such as the persistent gender gap in entrepreneurial activity. Social identity research could examine the development of linguistic identities over time and the congruence or divergence of MNC employees’ language-related identities with their national, functional, or location-based identities. Theories of intersectionality (Anthias 2008 ; Harper 2011 ) may help to conceptualize this complex interplay of multiple identities.

4.2.2 The Promise of Theories from Other Academic Disciplines

Having outlined fruitful contributions from different disciplines to the investigation of language effects in business, we reinforce Brannen et al.’s ( 2012 ) view that insights gained from disciplines such as linguistics, political science, and psychology can create frames of reference helping to understand the role of language in international business more profoundly.

Having seen the successful application of linguistic theories (e.g., Chen et al. 2006 ; Virkkula-Räisänen 2010 ) to business settings and economic phenomena, we support Pudelko et al.’s ( 2015 , p. 90) view that linguistics is an “obvious candidate” for cross-disciplinary pollination in this field. Recent work on the economic repercussions of linguistic gender-marking and future-time reference suggests that researchers should consider how other elements of language structure may correspond to labor market allocations as well as preferences for entrepreneurship. Moreover, the usefulness of these theories suggests that other theoretical lenses such as semiotics (Smith and Anderson 2007 ), evolutionary linguistics (Croft 2008 ), or socio-linguistics (Wardhaugh and Fuller 2015 ) could also contribute to the investigation of language diversity in business settings. Semiotics, for example, is the study of signs and how they are used to communicate with others (Chandler 2007 ). Besides considering pragmatic conventions of culturally conditioned language use (Wierzbicka 2003 ), researchers may examine how differences in prosodic conventions, i.e. acoustic cues like loudness of the voice, intonation, speaking rhythm, and speed (Sporer and Schwandt 2006 ) influence mutual understanding between employees speaking different mother tongues.

Our review also highlighted the enormous cognitive challenges employees are facing in today’s multilingual organizations. International business settings already entail high cognitive demands due to their dynamic and complex nature (Volk et al. 2014 ; Hadjichristidis et al. 2016 ), but these are substantially exacerbated by the burden of foreign language processing. According to Takano and Noda ( 1995 ), activities such as conversation or negotiation require both linguistic (i.e., communication) and non-linguistic information processing (i.e., thinking and deciding). Employees speaking a foreign language at work use a larger part of their working memory to allow for the linguistic processes, thereby sacrificing resources available for thinking and decision tasks (Baddeley 2003 ). Tenzer and Pudelko ( 2016 ) recently connected language-based cognitive load to the choice of communication media in virtual teams. However, it remains unclear how this mechanism generally affects decision making in business. Whereas some studies find that foreign language processing causes psychological distance and therefore triggers deliberate and reflective thinking (Keysar et al. 2012 ), others demonstrate the opposite, namely that decision making and behavior becomes more intuitive, automatic, emotional, and less analytic when people are cognitively distracted (Cornelissen et al. 2011 ). Neurolinguistic research on the processing of language in the human brain (for a review see Leikin 2016 ) should aim to resolve this puzzle, for example by using functional MRI technology (Cabeza and Nyberg 2000 ) to measure individuals’ brain activity while performing foreign language tasks.

4.2.3 Looking Beyond Disciplinary Boundaries

Given the multidimensional influence of language on international business activities, we encourage scholars to look beyond their respective mother disciplines, as interdisciplinary perspectives allow addressing “more complex questions than those which are typically formulated when relying on the standard assumptions and the narrowing focus usually found within disciplines” (Cantwell and Brannen 2011 , p. 3). Whereas the subject area of international business has already assembled an array of approaches from different disciplines, these mostly occurred independently from each other in separate publications. To proceed from this multi disciplinary setup to truly inter disciplinary research, scholars need to synthesize and interrelate arguments taken from different disciplinary perspectives (Cantwell and Brannen 2011 ).

Among many promising combinations, an integration of theories from international strategy research, organizational behavior, and international economics could advance our focal field with novel approaches. Strategy research could harness psychological insights from organizational behavior to gain a deeper understanding of individual employees’ reactions to corporate language policies and the ensuing dynamics on the group-level. This may reveal the contested and negotiated nature of language practices, show how tongues are mingling in daily business communication and, consequently, facilitate the design of more sophisticated language strategies. We also encourage strategy researchers with a language interest to take inspiration from the concepts and theoretical angles applied in economics. For example, they could expand current work on linguistic distance as an independent variable to explain entry modes or analyze language structures such as gender marking and future-time reference to analyze particular features of national institutions and policies. Finally, experimental work in behavioral economics on how language choice influences thoughts, feelings, and behavior could complement the psychological perspective of language-related organizational behavior research.

According to Harzing and Feely ( 2008 , p. 51), such synergies have not been fully realized so far, since scholars have been “deterred by the cross-disciplinary nature of the subject”. The slow progress may also be due to the enormous difficulties of achieving genuine interdisciplinarity, which Kockelmans ( 1979 ) already cautioned against almost four decades ago. Interdisciplinary research requires that specialists combine their expertise into an integrated response to the problem (Piso 2015 ), but there is a lack of clarity concerning how exactly this may be achieved (Repko 2007 ). Rogers et al. ( 2005 , p. 268) point to the “incommensurability of concepts, different units of analysis, differences in world views, expectations, criteria, and value judgments” between academic disciplines as obstacles to integration. Scholars have captured these challenges in different metaphors. Whereas Horn ( 2015 ) likens disciplines to cultures which require scholars involved in interdisciplinary work to undergo adjustment processes, dominant images come from the realm of languages. Since each discipline has its own conceptual vocabulary (Newell 2001 ) and scholars “speak in dialects that are specialized to their disciplines” (Wear 1999 , p. 299), the central barrier comes down to the difficulty of communicating concepts, theories, and methods across disciplinary boundaries (Stone 2013 ; Piso 2015 ). Disciplinary institutions such as academic journals, funding agencies, or university management furthermore discourage interdisciplinary integration, as they tend to evaluate individual scholars according to their capacity to adhere to idiosyncratic disciplinary conventions (Horn 2015 ).

Researchers aiming to capture the role of language in international business through interdisciplinary collaborations therefore need to prepare for setbacks (Horn 2015 ). However, if cross-disciplinary teams strive to explicate basic premises to each other (Wear 1999 ), communicate extensively about conceptual differences and engage in constant self-reflection and -evaluation (Szostak 2013 ), they can broaden their horizons and achieve theoretical innovation (Cantwell and Brannen 2016 ). If scholars overcome the related obstacles, interdisciplinary research endeavors promise to resolve complex issues which transcend the scope of a single research expertise (Piso 2015 ).

4.3 Methodology: Future Directions

Our review uncovered a number of patterns in methodology and data sourcing. Specifically, we found a slightly higher proportion of qualitative studies than quantitative work in the field. In terms of data sources, most research is cross-sectional and interview-based. Based on these findings, we offer recommendations for extending the field’s methodological toolbox and substantiating its empirical basis with new forms of data collection.

4.3.1 Methods

Our systematic review reveals that language-related research in international business has evolved considerably, both in terms of qualitative and quantitative methods. This methodological diversification bears the potential for promising complementarities. Qualitative approaches dominated the field in its early days and are certainly well suited to build robust middle range theory in previously unexplored areas (Eisenhardt and Graebner 2007 ), and therefore highly suitable for investigating still unchartered effects of language diversity on international business. The growing number of quantitative studies can test the propositions generated by exploratory case study research (Creswell 2013 ). We also encourage a broader application of experimental studies such as prisoner dilemma games in the field (see e.g., Akkermans et al. 2010 ; Volk et al. 2014 ). The use of experimental studies has the advantage that the use of a particular language use can be manipulated between treatments and thus the effect of language can be isolated. Experimental games also allow us to measure actual behavior rather than relying on self-reported surveys or interview responses, which in turn reduces the effects of social desirability and self-presentation. Another research method could involve textual analysis of concepts using software such as Diction (Ridge and Ingram 2014 ). Multi-method studies combining qualitative, quantitative, and experimental approaches to language effects in international business are still rare (see e.g., Angouri 2013 and Barner-Rasmussen et al. 2014 for exceptions), yet they would be invaluable to enhance the robustness of emerging theories in the field. Parallel to our encouragement of interdisciplinary theorizing, we urge scholars to broaden their methodological repertoire by tapping into the toolboxes of neighboring academic disciplines.

4.3.2 Data Sources

We urge qualitative researchers to go beyond the dominant interview methodology, complementing their datasets with observations of naturally occurring linguistic misunderstandings among employees of multinational corporations. Whereas interviews may be biased by social desirability and only reflect consciously processed information, observations capture actual behavior and pick up effects which the interacting parties may not be aware of. Future studies may also extend the pioneering efforts in multi-sited organizational ethnography and introduce approaches from neighboring disciplines such as discourse analysis for sociolinguistics (Schiffrin et al. 2008 ) or life histories from ethnography (Musson 2004 ) in order to comprehensively understand the complex influence of linguistic diversity. These techniques would also provide longitudinal data, which could meaningfully advance the field by examining the development of language policies over time. In the realm of quantitative studies, our review highlights the need for more large-scale studies covering MNCs in a wide variety of country contexts in order to probe the generalizability of the impact of foreign language use.

4.4 Findings by Levels of Analysis: Future Directions

Our systematic review of language research in international business demonstrates that this fast-growing field captures language-related phenomena on all major levels of analysis. These findings suggest a series of promising future research avenues for examining language at each level, which we will outline below. Table  3 indicates additional theories, phenomena, and research questions on different levels of analysis, thus generating a general framework for future language-related research in international business.

4.4.1 Individual Level Perspectives

A more profound understanding of how language influences individual outcomes could be promoted through fundamental research in behavioral economics. An example is Akkermans et al.’s ( 2010 ) experimental study on how language priming influences individuals’ thoughts and behaviors. Scholars could for instance explore how individuals’ associations with key management concepts from the Anglophone world differ depending on the language in which they voice these thoughts. Individual-level research on language in international business could also generate a deeper understanding of the role bilingual professionals can play in MNCs. Whereas previous research mostly focused on coordinate bilinguals (those who acquire their second language very early in life, usually in the same context), future studies could extend the investigation to compound bilinguals (those who acquire their second language later in life, often in another context; see Larsen et al. 1994 ), a situation more typical for bilingual professionals (Day and Wagner 2007 ) and migrant workers (Roberts 2007 ). As immigrant entrepreneurs play a key role in growing their host economies (Wadhwa et al. 2007 ), they constitute a particularly promising target group for studies on compound bilinguals. Existing work on language use in polyglossic urban areas and multilingual regions (Lüdi et al. 2010 ) and on internal migration (Lüdi 1992 ) can provide useful starting points here. International business scholars may also draw on the work of Berthoud et al. ( 2015 ) in studying how individuals draw on multiple linguistic repertoires to construct, transmit and apply knowledge. Linguistic policy research on bilingual education (see e.g., Riagáin and Lüdi 2003 ) can meaningfully inform studies of linguistic capital in modern multinationals. Furthermore, we encourage the field to investigate the behavioral effects of language diversity in business contexts. For example, language-based cognitive load and anxiety through foreign language use have been largely ignored as a cause of health issues.

4.4.2 Group Level Perspectives

Regarding the group level of analysis, existing studies reveal that language barriers substantially influence team communication, knowledge sharing, and other processes. We therefore suggest that future researchers examine new group phenomenon such as co-located and virtual teams, and the roles of bilingual group members as boundary spanners and bridge-makers. Within these groups, future research could test theories of the consequences of linguistic ostracism (e.g., Robinson et al. 2012 ). More specifically, future studies could extend recent investigations on the language-based choice of communication media (Tenzer and Pudelko 2016 ) to probe the suitability of established frameworks like media richness theory (Daft and Lengel 1986 ) or media naturalness theory (Kock 2004 ) in multilingual settings. Finally, researchers could examine the interplay between linguistic identities and national, cultural, functional, location-based, gender-driven, age-related, or other identities to explore the disruptive potential of language-based faultlines (Thatcher and Patel 2012 ; Hinds et al. 2014 ) within and across multilingual groups.

4.4.3 Firm Level Perspectives

Concerning the firm level, our review demonstrates that the majority of international business scholars interested in linguistic diversity investigate effects in large MNCs. We argue that it might be interesting to study language effects in other firms, particularly small and medium enterprises, new ventures, and NGOs. Considering that business researchers form a transnational community working with English as a lingua franca (Tietze and Dick 2013 ), the impact of linguistic diversity on business schools (see Lauring and Selmer 2012 ; Śliwa and Johansson 2014 , 2015 ) also offers a worthwhile avenue for exploration, as does the increasingly interdisciplinary university research environment. Comparing language policies, practices, and effects between these different contexts can assist in understanding the boundary conditions for theories of language diversity in international business. To gain a more comprehensive understanding of corporations’ “transnational business communication capital” (Tietze et al. 2016 ), firm-level research should furthermore study occupational vocabulary and sociolects in addition to the commonly investigated diversity in national languages.

4.4.4 Country Level Perspectives

With respect to research on the country level, our systematic literature review identified a substantial upward trend in research on the economic implications of linguistic relativity, determinism, and grammatical structures. This line of “Whorfian economics” (Fabb 2016 ) research could be further extended by examining whether women’s occupational choices or the gender pay gap correlate with the intensity of linguistic gender marking in a country’s dominant language. Considering that a recent experiment demonstrates significant differences in children’s intertemporal choices depending on their mother tongue (Sutter et al. 2015 ), it would be interesting to investigate the effects of obligatory or optional future-time reference in a country’s language on citizens’ preferences for long- versus short-term investments. An experiment capturing divergent behaviors between the speakers of minority and majority languages (Cappelletti et al. 2015 ) furthermore highlights the need to study language effects in countries with several official languages. Related themes involve the impact of countries’ colonial past on language use or the influence of government initiatives trying to counteract the “excessive” use of English words (for the Chinese case see Economist 2014 ) on communication.

4.4.5 Multi-Level Perspectives

Our review also yields a number of recent studies connecting the perspective of individual speakers with language effects on their teams or organizations. We consider these multi-level approaches highly promising, as multilingual collaborations can only create synergies by integrating the strengths of individual contributors into an outcome greater than the sum of what each employee could have achieved individually (Katzenbach and Smith 1993 ). To understand how these synergies arise, scholars need to capture so-called “emergent processes” (Kozlowski and Klein 2000 ; Kozlowski et al. 2013 ), which transform intra-personal thoughts, feelings, and behaviors through interaction and communication into higher-level collective phenomena at the dyadic, team, or organizational level. We argue that emergent processes such as cohesion, confidence, conflict, learning, adaptation, and organizational climate could be fruitfully studied under a language lens. Besides this bottom-up emergence, scholars may also study the top-down influences of a country’s linguistic context or organizational language strategies on team dynamics or individual cognitions, emotions, and behaviors. Whereas many studies have tried to tackle such processes with data collection at a single level of analysis, we encourage future research could gain a more holistic understanding by building theory, and collecting and analyzing data at all involved levels (Hitt et al. 2007 ). To be successful in such complex research designs, scholars have to articulate the theoretical bases of their work carefully (Hitt et al. 2007 ) and consider the limited capabilities of existing software packages in multilevel modelling (Kozlowski et al. 2013 ). As the transformation of individual language-related cognitions and emotions into collective processes takes time, they need to conduct more longitudinal research, which are more time-consuming and expensive. Given that each academic discipline tends to favor specific levels of analysis, multilevel research often requires an interdisciplinary mindset. To the extent that these challenges are mastered, multi-level research will break new ground in language-related international business studies.

5 Limitations

The scope and focus of our study entails some limitations, which indicate possible extensions in future research. First, we had to omit monographs and book chapters from our systematic review, because the major online databases do not list them. This might have excluded relevant contributions by linguists, translation scholars, and members of other disciplines who occasionally touch on the subject area of international business, but rely more on book publications than academics in business studies do. Whereas pragmatic constraints did not allow us to systematically review the theories, methods, and empirical findings of these contributions, we have drawn many suggestions for future research from this body of literature. Interested readers may continue their studies with the Handbook of Multilingualism and Multilingual Communication (Auer and Wei 2007 ), the language section within the Routledge Companion to Cross - Cultural Management (Holden et al. 2015 ) or the recent Palgrave Handbook of Economics and Language (Ginsburgh and Weber 2016 ).

Second, we only included English-language publications in our review. To check for bias, we also entered the equivalents of our search terms in French, Spanish, and German as there are established business journals in these national languages (Venard 2007 ). We found that publications in these languages did not yield substantial insights beyond the English-language literature. Publications in Portuguese, Russian, Hindi, and Mandarin might have yielded more insights on the BRIC countries, but we decided to limit our review English-language material, as no research team would be able to read all major world languages. Most importantly, 75% of articles in the social sciences are written in English and the hegemony of English as a language of science is rising (Enrique Hamel 2007 ). Nevertheless, we would hope that scholars with language capabilities in English as well as one of the above languages could act as bridge individuals.

Third, the scope of our study did not allow us to include all forms of language diversity in business settings. Brannen et al. ( 2014 ) name technical or electronic language as potentially insightful avenues of research, whereas a large stream of discourse, rhetoric, and narrative analysis by organization theorists investigates how top managers recontextualize content through language, thus shaping sensemaking, organizational identities, and strategic orientations (Boje et al. 2004 ; Phillips et al. 2004 ). Future research could fruitfully connect the “linguistic turn in organizational research” (Alvesson and Kärreman 2000 ) focusing on rhetorical and metaphorical language with the linguistic turn in international business targeting on the multilingual realities in global corporations.

Fourth, if we had reviewed a larger number of publications from communication studies, sociolinguistics, and psycholinguistics, our review could have portrayed the complex concept of language in greater depth and could have shown a broader array of methods to empirically capture it. However, it was not feasible to cover these disciplines in their entirety within the space constraints of this article, so we limited our scope to papers studying how language plays out in international business settings. Whereas most publications dealing with this context were written by business scholars and economists, they are informed by many different concepts of and approaches to language. Future studies could build on our efforts by drawing more comprehensively on the achievements of linguistics, the leading discipline studying languages in form, meaning, and context and under a variety of aspects (Akmajian et al. 2001 ).

Fifth, we need to balance our many suggestions for future research by acknowledging a certain danger of further proliferation in research themes. If the diverse approaches to language in international business evolve in parallel and independently from each other, the field may become even more fragmented than it is today. An active dialogue between approaches and a synthesis between dominant themes will be needed to reach a holistic understanding of language in international business. To this end, we invite scholars from different mother disciplines to collectively define a set of “big” research questions, which can unite their efforts for the years to come.

6 Conclusion

Reinforcing the frequent calls for more conceptual innovation and empirical investigations on the impact of language on international management (see e.g., Holden 2008 ; Piekkari and Zander 2005 ), our systematic and thorough review of 264 publications on language in international business identifies some progress in understanding the “multifaceted role of language in international business” (Brannen et al. 2014 ). As we note a growing body of research drawing on concepts from a variety of disciplines and employing diverse methodologies, many international business scholars have gained a better understanding of the function and role of language within their subject area. However, our review also reveals that the field remains fragmented, with serious knowledge gaps in theory, data, methodology, and content. Reflecting on Holden’s ( 1987 , p. 234) statement that “linguists who aspire to an integration of linguistics into the management sciences face a herculean task”, we conclude that part of this task has been fulfilled to date, but much remains to be done. To motivate future research in this direction, we offered multiple opportunities for advancing the investigation of language diversity in international business research. We particularly encourage the integration of insights from different academic disciplines as an opportunity to gain a deeper understanding of language complexity in international business. Extending Piekkari et al.’s ( 2014 , p. 244) recent conclusion that “the pervasive effects of language need to be taken more fully into account in explanations of international business activity”, we argue that a more profound understanding of its effects will have a very positive impact on business and management studies as a whole.

International business scholars typically conceptualize lingua franca as “a common language different from the parties’ native language, very often English” (Cuypers et al. 2015 , p. 430). Whereas some researchers see a hegemony of English native speakers in a world focused on English (Tietze and Dick 2013 ), others believe that this hegemony “is now gradually being replaced, particularly in business contexts, by the use of a neutral form of BELF that neither originates in native speaker models nor is owned or influenced by them” (Nickerson 2015 , p. 392). Their idea is in tune with Brannen et al.’s ( 2014 , p. 496) statement that “lingua franca was originally conceived as a neutral form of communication without cultural or political bias”. Reinforcing that view, Berthoud et al. ( 2015 , p. 7) emphasize that lingua franca use need not even be monolingual, but may be a “hybrid code” drawing on speakers’ multilingual repertoires.

Recent statistics of the Journal of International Business Studies support this view, showing that the most recent years’ published articles were written from a variety of disciplinary standpoints (Springer 2015 ).

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Acknowledgements

We thank Rebecca Piekkari, Heather Berry, and EIBA participants for helpful comments on earlier versions of this manuscript. We also thank the Editor and two anonymous reviewers for their extremely detailed and insightful feedback.

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Helene Tenzer

Kogod School of Business, Washington, DC, USA

Siri Terjesen

Norwegian School of Economics, Bergen, Norway

Middlesex University Business School, London, UK

Anne-Wil Harzing

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Appendix: list of studies included in systematic review.

Ahmad and Widén (2015)

Akkermans, Harzing and Witteloostuijn (2010)

Alvarez, Taylor and Gomez (2016)

Ambos and Ambos ( 2009 )

Andersen and Rasmussen (2004)

Angouri ( 2013 )

Angouri and Miglbauer (2014)

Babcock and Du-Babcock, (2001)

Balaji, Roy and Lassar (2016)

Barner-Rasmussen and Aarnio ( 2011 )

Barner-Rasmussen and Björkman (2005, 2007)

Barner-Rasmussen et al. ( 2014 )

Bell and Puzakova (2016)

Berthoud, Grin, and Lüdi ( 2013 , 2015 )

Björkman and Piekkari (2009)

Blenkinsopp and Pajouh (2010)

Bordia and Bordia (2014)

Bousseba, Sinha, and Gabriel (2014)

Brown and Sachdev ( 2009 )

Buckley et al. (2005, 2014)

Butler ( 2011 )

Cayla and Bhatnagar (2016)

Charles (2007)

Charles and Marschan-Piekkari (2002)

Chen ( 2013 )

Chen, Geluykens and Choi ( 2006 )

Chidlow, Plakoyiannaki and Welch ( 2014 )

Chong, Guillen and Rios ( 2010 )

Cleveland et al. (2014)

Cohen and Kassis-Henderson (2012)

Comu, Unsal and Taylor (2011)

Conaway and Wardrope (2010)

Crick (1999)

Cuypers, Ertug and Hennart ( 2015 )

Debaere, Lee, and Lee (2013)

de Groot ( 2012 )

Dhir (2005)

Dhir and Gòkè-Paríolá (2002)

Dhir and Savage (2002)

Dotan-Eliaz, Sommer, and Rubin ( 2009 )

Dow, Cuypers, and Ertug ( 2016 )

Du-Babcock (2006, 2007)

Du-Babcock and Tanaka (2016)

Egger and Lassmann ( 2015 )

Ehrenreich (2010)

Evans (2004, 2013)

Feely and Harzing ( 2003 )

Fenko, Otten, and Schifferstein (2010)

Fernández-Ortiz and Lombardo (2009)

Fidrmuc and Fidrmuc ( 2016 )

Fixman ( 1990 )

Fredriksson, Barner-Rasmussen, and Piekkari ( 2006 )

Freeman and Olson-Buchanan ( 2013 )

Froese, Kim, and Eng (2016)

Fujio (2004)

Goodall, Li, and Warner (2006)

Graf (2004)

Gray and Massimino (2014)

Groutsis, O’Leary and Russell (2016)

Gunnarsson (2014)

Hadjichristidis, Geipel and Surian ( 2016 )

Handford and Matous (2015)

Harris and Bargiela-Chiappini (2003)

Harzing (2005)

Harzing et al. (2009)

Harzing and Feely ( 2008 )

Harzing, Köster, and Magner ( 2011 )

Harzing and Maznevski (2002)

Harzing and Pudelko ( 2013 , 2014 )

Hechavarría et al. (2016)

Heikkilä and Smale ( 2011 )

Hicks, Santacreu-Vasut, and Shoham ( 2015 )

Hinds, Neeley, and Cramton ( 2014 )

Holden (1987, 1998, 2008)

Holden, Kuznetsov, and Whitelock (2008)

Holden and Michailova ( 2014 )

Horn (2016)

Hosoda, Nguyen, and Stone-Romero ( 2012 )

Hultgren (2014)

Hurmerinta, Nummela, and Paavilainen-Mäntymäki ( 2015 )

Hutchinson (2002, 2005)

Hwang (2013)

Ishii (2012)

Isphording (2013)

Isphording and Otten (2013)

Itani, Järlström, and Piekkari, ( 2015 )

Janssens, Lambert, and Steyaert (2004)

Janssens and Steyaert ( 2014 )

Jansson (2014)

Jeanjean, Lesage and Stolowy (2010)

Jeanjean et al. (2014)

Johansson and Śliwa (2014)

Joshi and Lahiri ( 2014 )

Jung and Louhiala-Salminen (2012)

Kameda (2005)

Kankaanranta (2006)

Kankaanranta and Louhiala-Salminen (2010, 2013)

Kankaanranta, Louhiala-Salminen, and Karhunen (2015)

Kankaanranta and Lu (2013)

Kankaanranta and Planken ( 2010 )

Kassis Henderson ( 2005 )

Kedia and Reddy ( 2016 )

Keysar, Hayakawa, and An ( 2012 )

Kingsley (2009, 2013)

Klitmøller and Lauring ( 2013 , 2015)

Klitmøller, Schneider and Jonsen ( 2015 )

Kordsmeier, Arn, and Rogers (2000)

Kraak and Holmqvist (2016)

Kroon, Cornelissen, and Vaara ( 2015 )

Ku and Zussman (2010)

Kubat and Swaminathan ( 2015 )

Kulkarni ( 2015 )

Kuznetsov and Kuznetsova ( 2014 )

Lagerström and Andersson (2003)

Latukha et al. ( 2016 )

Lauring (2007, 2008)

Lauring and Klitmøller (2014, 2015)

Lauring and Selmer (2010, 2011, 2012a, b, 2013)

Lauring and Tange (2010)

Lehman-Wilzig (2001)

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Tenzer, H., Terjesen, S. & Harzing, AW. Language in International Business: A Review and Agenda for Future Research. Manag Int Rev 57 , 815–854 (2017). https://doi.org/10.1007/s11575-017-0319-x

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Received : 18 May 2016

Revised : 03 April 2017

Accepted : 01 June 2017

Published : 04 July 2017

Issue Date : December 2017

DOI : https://doi.org/10.1007/s11575-017-0319-x

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Iran's stealth drones have become the new blueprint for international warfare

• Iran has become a global drone powerhouse as countries around the world copy its technology.
• Russia has become increasingly reliant on Iranian drones to fight its war in Ukraine. 
• Iran can easily bypass Western sanctions and buy electronic parts from Asian suppliers.

Iran's stealth drones and their copycats are popping up on battlefields from Ukraine to Sudan, making it a standout in global drone warfare and raising concerns about increasing military instability around the world.

In the past forty years, Iran has emerged as an expert in low-tech drone warfare thanks to decades of Western sanctions that forced the country to innovate weapons production by any means possible.

Countries around the world are now increasingly taking inspiration from Iran's drones. Bloomberg reported this week that at least six countries had ramped up production of Iranian drones in the past two years, bringing the total number of countries producing drones with Iran's help to at least a dozen.

The issue has become of particular importance as Russia becomes more reliant on Iranian tech to produce its drones for the war in Ukraine. Iran maintains that it isn't selling drones to Russia, but documents and extensive reporting indicate otherwise.

Business Insider reported in January that Russia was probably already in possession of an explosive new version of Iran's Shahed drone , causing massive headaches for Ukraine's air defenses. 

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Iran's Shahed-136 drones are frequently popping up on Ukrainian battlefields, despite being made up almost entirely of American and European parts — highlighting just how easy it is for Iran to bypass Western sanctions and buy electronic parts from Asian suppliers and front companies, as Bloomberg reported.

Iran is meanwhile pocketing foreign money in exchange for its much-coveted drone tech and expertise.

Bloomberg reported that the country was primarily using model airplanes propelled by lawnmower motors and guided by US-made components to power its drone empire. But despite the seemingly makeshift nature of the weapons, both the US and Israel — two of the most powerful militaries in the world — are struggling to defend themselves against the stealth drones that are reported to circumvent Western defenses by shadowing American drones.

In January, an Iranian exploding drone hit a US military base in Jordan, killing three US service members. The Washington Post cited a defense source who said the weapon was a small attack Shahed-101.

The drone was able to sneak past American defenses by shadowing a US drone also landing at the base — a trick believed to have been picked up from Russia, Bloomberg reported.

" Russia and Iran are learning from each other . That is almost as important as the technology-sharing itself," Matthew McInnis, a Pentagon intelligence officer who was a State Department representative for Iran, told the outlet.

But Iran's influence goes beyond Russia. Iranian-backed Houthis have curtailed trade in the Red Sea in recent months by perpetrating drone attacks on cargo ships.

Bloomberg reported that Ethiopia had used Iranian drones to squash rebellions in the country, while Tajikistan, Algeria, and Venezuela were also partnering with Iran.

Watch: VIDEO: Iran reports that drones attacked a military factory in Isfahan

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New Constitutional Challenges Haven’t Fixed Agency Court Ills

A year has passed since the US Supreme Court opened the door to Americans trying to escape the federal government’s administrative tribunals. Yet real relief from agency proceedings remains elusive. Plaintiffs sometimes must litigate on two fronts, and the process is complicated and frustrating.

The Supreme Court held in Axon Enterprise v. Federal Trade Commission that federal courts can hear and resolve constitutional objections to administrative tribunals in federal agencies before individuals and entities are forced to endure them.

Since then, Pacific Legal Foundation has represented many clients litigating Axon -style challenges to federal agency tribunals, but the challenges are difficult to win. Meanwhile many federal district courts allow the tribunal’s work to continue despite a pending challenge, leading to an arduous litigation process.

The courthouse doors are open, but plaintiffs continue to struggle. The new decision has more often created a parallel lane of litigation in federal courts than chipped away at overreaching tribunals.

This parallel litigation drains plaintiffs’ resources. And it may take years for federal courts to decide about the constitutionality of the agency process.

Post-Axon Challenges

Axon arose because Congress empowers many federal agencies to accuse individuals or companies of breaking the law and adjudicate liability themselves. These proceedings involve neither an independent judge nor jury, as the Constitution requires.

Before Axon , you had to navigate the entire administrative process before receiving a hearing with a federal judge where you could object to anything unconstitutional about the process. Now, you have the opportunity to pause the hearing and have a court determine its constitutionality before the administrative proceedings.

Pacific Legal Foundation has litigated Axon -style challenges to actions of several federal agencies including the Department of Agriculture, Consumer Product Safety Commission, Environmental Protection Agency, National Credit Union Administration, and Securities and Exchange Commission. These cases have yielded some success, but even more frustration.

Importance of Stays

Some federal agencies recognize the constitutional uncertainties and are willing to pause their administrative actions, allowing Axon challenges to be resolved in federal court before proceeding.

For example, the NCUA agreed to stay its administrative proceeding against Jeffrey Moats for millions in restitution and civil penalties while a federal court hears his constitutional claims.

Moats was CEO of the Edinburg Teachers Credit Union in southern Texas for more than 25 years. The credit union had an excellent track record during his tenure until March 2020, according to Moats’ federal district court complaint .

The Texas Credit Union Department took control of the credit union in March 2021 and named the NCUA conservator. Moats was fired immediately, and the NCUA froze his withheld retirement benefits and seized personal property, the complaint said.

Eventually, the agency found Moats didn’t commingle business and personal assets and returned his property, the complaint said. Still, the NCUA is now seeking about $5 million in restitution and fines against him for unjust enrichment and breach of fiduciary duty through an in-house tribunal, where any initial appeal would be decided within the same agency, Moats alleged.

Moats argued to the federal district court that the NCUA’s administrative law judge is unconstitutionally protected from the president’s removal power, and that the administrative hearing deprives him of his constitutional rights to a jury and due process of law, his complaint said.

The agency’s agreement to stay the administrative proceeding allowed for more certainty in the process for both the agency and respondent while the federal court case proceeded. The federal district court recently ruled against Moats, who is considering an appeal. If the NCUA continues its stay and he prevails, it will prevent Moats from being subjected to an unconstitutionally structured administrative tribunal.

Litigation Complications

On the other hand, when agencies refuse to wait for a federal court to decide an Axon challenge, the path forward is much more complicated. To pause an administrative hearing, the plaintiff must seek a stay from a federal district court on an emergency basis. But the standard for obtaining that stay is high: The plaintiff must convince the court they are likely to win their case.

Additionally, a preliminary ruling in favor of an Axon plaintiff often has implications beyond the case itself. The constitutional problems with one administrative tribunal are frequently shared across federal agencies. Many judges are reluctant to issue a stay when that decision has broad implications and must be made quickly and on a preliminary basis.

This dynamic was evident in the Axon suit Jimmy McConnell brought with PLF against the USDA after the agency accused him of entering horses in a prohibited condition into Tennessee Walking Horse competitions, according to McConnell’s complaint.

McConnell challenged the USDA adjudication process in which an agency employee could have imposed fines and disqualified him from his business without a jury. The employee wasn’t properly appointed to an office in a manner consistent with the exercise of such significant power, McConnell alleged.

But the court refused to stay McConnell’s USDA hearing, saying the law cut against him in the preliminary injunction phase. This is despite favorable Supreme Court precedent and an acknowledgment that McConnell might have prevailed.

Ultimately, McConnell obtained a favorable settlement from the USDA, but his hearing process shouldn’t have continued based on the infirmities of the process.

So, while Axon made it possible to challenge administrative tribunals without going through the hearing process, actual relief is difficult to obtain. Courts are reluctant to stay the tribunals if the agency doesn’t do it itself. And final decisions on constitutionality can take years to obtain. In the meantime, the administrative tribunals grind on, taking our clients’ time and money and inflicting an emotional toll.

Perhaps as Axon challenges progress, this process will improve. More likely, real relief will only come if the Supreme Court ends these unconstitutional administrative tribunals once and for all.

The case is Axon Enter., Inc. v. FTC , U.S., Nos. 21-86 and 21-1239, 4/14/23.

This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law and Bloomberg Tax, or its owners.

Author Information

Josh Robbins is an attorney at Pacific Legal Foundation, a public interest law firm that defends Americans’ liberty against government overreach and abuse.

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To contact the editors responsible for this story: Jessie Kokrda Kamens at [email protected] ; Jada Chin at [email protected]

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