Language, knowledge transfer and firm’s strategic assets: the strategic role of language in knowledge transfer to China

Abstract

This article is intended to examine the exact role of language in intra-firm cross-country knowledge transfer from the perspective of developing firm’s strategic assets. We find that inadequate language ability can lead to communication failures and cultural misunderstanding, and has the potential to destroy the process of knowledge transfer. Hence, language is not an operational issue but of strategic importance to the transfer of knowledge within multinational enterprises. As language ability is uniquely related to the specific technical, managerial and cultural aspects of a firm, hard to substitute and imitate, it should be regarded as one of the firm’s strategic assets and be dealt at strategic level.

Keywords:

• language
• knowledge transfer
• strategic assets
• multinational enterprise
• China

Acknowledgements

The authors are grateful for the financial support from the Sino-British Fellowship Trust and The Centre for Chinese Business and Development at University of Leeds.