24 Mar 2014  Research & Ideas

The Surprising Link Between Language and Corporate Responsibility

Research by Christopher Marquis shows that a company's degree of social responsibility is affected by a surprising factor—the language it uses to communicate.

 

We've heard that Eskimos have 100 words for snow—a common way of expressing how language affects the way we see the world. Whether or not that particular example is true, cultural linguists have long theorized that the words a particular group of people have at their disposal influences how they categorize the world, emphasizing some values or activities over others.

In other words, languages shape the way people think.

After hearing about one such theory from visiting doctoral student Hao Liang from Tilburg University, Harvard Business School Associate Professor Christopher Marquis teamed with Liang and Luc Renneboog of Tilburg University, and Sunny Li Sun of the University of Missouri—Kansas City to study whether the same held true in business. Would a company's use of language, particularly by the CEO and other top executives, guide its business philosophies and decisions?

A company's native language can affect its policies.
Photo: iStockPhoto

"It seemed to me to be an amazing finding if it were true," Marquis says. "We asked, what are some other tests that could be done in a business context?"

The research team had the perfect testing ground: corporate social responsibility. Researchers have long shown that there are differences in how socially responsible companies depend on the culture of their country of origin. Companies located in countries including Germany, Japan, and most Nordic nations are more likely to practice CSR and sustainability initiatives than are companies in France, India, or Russia, for example.

"It seemed to me to be an amazing finding if it were true"

Because culture is subjective, however, it is notoriously difficult to test in a research setting. "Everyone knows culture is important, but no one can tell you exactly how it matters," says Marquis. Language, on the other hand, is a more objective difference that can be easily measured.

Better yet, no one had studied this question.

In recent years, researchers have taken increasing interest in measuring CSR (or as it's sometimes termed, environmental, social, and governance—or ESG—factors), both because of its importance to socially conscious investors and as an indicator of long-term corporate health. Firms such as Morgan Stanley Capital International crunch hundreds of factors from carbon emissions to the percent of women on corporate boards in order to produce indices of CSR for individual companies.

The research team set out to examine whether these measures of CSR correlate to the languages spoken in each company's home country.

LANGUAGE MATTERS

Their findings, contained in a new working paper titled "Speaking of Corporate Social Responsibility," suggest that they do. Key among their results is that idea that it is not the words used in a particular language that matters, but the way that language is constructed. They looked at the constructions used to describe future actions, and found that the more separation placed between present and future events, the less socially responsible a company was.

Marquis and his fellow researchers based their inquiry on a similar study regarding individual decision-making done by UCLA economist Keith Chen. In a paper published in the American Economic Review in 2013, Chen noted that some languages, such as English, Spanish, Arabic, and Korean, require speakers to use a completely different structure to speak of the future—for example, changing "It is raining today" to "It will be raining tomorrow." In other languages, such as German, Swedish, Chinese, and Indonesian, speakers use essentially the same structure. Saying "It is raining today" is grammatically equivalent to saying "It is raining tomorrow."

In his research, Chen found that speakers of the former languages with strong future-time reference (FTR) tended to focus and act less on the future—presumably because there was more linguistic distance between future and the present. They save less, become more obese, and even practice less-safe sex than in weak FTR languages, which use less separation between what is and what is to come.

Like saving money or dieting, corporate social responsibility is an inherently future-oriented activity, Marquis notes—and thus subject to the same phenomenon of language.

"While we might hope that companies do good for the community because it's the right thing to do, in general they think of it as making a short-term trade-off for a long-term return. It doesn't have to have immediate payback. As one corporate executive said to me, 'I'm willing to accept a long time horizon, but if it's not going to have a positive influence eventually, I'm not going to do it."

BUILDING A STUDY

To determine a company's CSR performance, the researchers relied on rankings of 1,500 companies from 1999 to 2011 in MSCI's Intangible Value Assessment, and sustainability data from the Vigeo Sustainable Country Ratings. These were matched with the company's official language and strong/weak orientation toward the future, and several moderating variables.

Marquis and his fellow researchers were able to determine that corporations in countries with a strong FTR language scored 26 percent lower on CSR values than those with a weak FTR language.

Of course, that finding could be confounded by other cultural factors—especially since many of the weak FTR language countries are in Scandinavia, which is well known for being socially liberal. To double check, the researchers ran the numbers excluding Scandinavia and found they still held up.

"The idea that language affects a business strategy is pretty fundamental to our results"

Furthermore, they performed a unique check involving Belgium and Switzerland, two countries with multiple official languages, at least one of which is strong or weak FTR. Painstakingly going through and coding each company according to the dominant language in its headquarters city, they were able to show CSR scores differed by language even within the same country.

OVERCOMING THE LANGUAGE BARRIER

Lest one conclude that the US, France, and other strong FTR countries are doomed when it comes to social responsibility, Marquis and his colleagues also found that language isn't necessarily destiny. Looking at a variety of factors, including the degree to which a company had branches in different countries or even held foreign assets, they found that the more globalized a firm is, the less the type of language influenced its CSR scores.

"The idea is the more exposed you are internationally, the more you encounter different languages and situations where people have a different way of approaching things," speculates Marquis. "Our assumption is that this will then have an influence on the local company. Having all of those influences somehow breaks down the effect."

As companies put more of a focus on CSR, understanding these underlying distinctions may help global managers figure out where tendencies towards future thinking may be strong or weak, and tailor their programs effectively. Beyond those findings, however, the implications of future-focused language may have other effects on corporate behavior.

"The idea that language affects a business strategy is pretty fundamental to our results—and may affect dividend reinvestment, expansion, acquisition, and international growth," says Marquis. "CSR is just one way to test the effect of language on long-term activities—but there are many other long-term activities that could correspond to this, too."

About the author

Michael Blanding is senior writer at Harvard Business School Working Knowledge.

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Comments

    • Bea M. Dambreville
    • Administrative Assistant, City of Boston

    Could this same analysis be used for "working in teams". Specifically their strategy and outlook currently and for future annual goals?

    Using your quote-"They looked at the constructions used to describe future actions, and found that the more separation placed between present and future events, the less socially responsible a company was."

     
     
     
    • Tim Bryan
    • Director, +MAgNet-, Inc. 501(c)(3)

    I would love to read a detailed analysis of companies' marketing language, especially the two cable giants, etc., including misleading, unreadable fine print (esp. white text on a white TV background that pops up for a few seconds) that contradicts the larger print/voice offer stating that you must first buy a (overpriced) bundled add-on and that the promo. price is for only three months, etc. This is extremely unfair since we also allow monopolies to grow 'too big to fail' and thus must put up with deceptive ads and outright lies. Maybe your ethics department can collaborate with you.

     
     
     
    • Rushabh Mehta
    • Founder, ERPNext

    I think this is a very weak conclusion, there could be other cultural factors that affect why people use the language they use. People tend to follow, mimic the tone of their role models or cultural icons. As far as I can understand, there could be a third factor that could influence both FTR and CSR.

     
     
     
    • Dr. James May
    • Chairman of the Board, Native American Television

    Speaking of language you might have started out by explaining what you mean by CSR.

     
     
     
    • saravanan
    • consultant, ibm india

    assuming that parallel research confirms the postulate - what does it tell about the system of government (democracy - driven by france, england and usa) , economy (capitalism - driven by uk and usa in that order), or much of the digital tech world (usa largely so far)...

    why restrict the finding to CSR or business strategy. if language as a measure of culture is affecting decision making - it will affect decision making and ideas / concepts everywhere - not just in business.

    i wd think - the hypothesis and the early research so far requires additional confirmation - and that might lead to us to question a number of other "assumed good" behaviour in a socio-politico-economic-business context.

     
     
     
    • Jackson Dludlu
    • Director, Mastogenix

    I worked for a major global company for four years. The language construction, tone and focus used at the corporate head office was completely different from that used in the locality I was based in. The local company was out of synch with head office. This was mainly because there was no direct communication between head office and the local office save for the communication posted on the intranet. Very few local employees took time to browse the intranet. Even senior managers had no idea what the CEO's priorities were. The local language based on local corporate culture led to myopic outlook to the business which led to a similarly myopic strategy with limited focus in the future. The company is now losing business because appointments and promotions were linked to a flawed strategy. Did the study quantify the degree to which the language permeated the company structures in question? Did the study define language as that which was expressed by the workers at the coal face or was it that which was used by the few sprinklings of senior managers at the top?

     
     
     
    • Mervyn Extavour
    • Director/President, ACTT-NATPETT

    there is surely some conclusive evidence to this discussion. Recently I heard the President of the USA at a press conference in the European Union - express his delight at the 'outstanding' work of one of the officials of the EU - and I wondered whether he was alluding to work left undone or work exceptionally done. The British are always very careful to coin language, particularly when one word can mean several meaning - or that any range of meanings can be attributed to one word...

     
     
     
    • Hugh Quick
    • home, none

    Language is more than a means of communicating with others, it defines a way of thinking. Learning languages widens one's mental horizons, I wish that I had managed to do that.

     
     
     
    • Maaike Harmsen
    • Director, Eline CSR ltd.

    I am not a linguist, and would like to know somethings about the Dutch language and their related performance in CSR: it is stated in the article as a weak language, but the Dutch can use weak FTR as much as strong FTR. Is there any more information on this form of FTR available? And so, does this influence the relation between performance and language?

     
     
     
    • Wilhelmina Thomson, Ph.D.
    • Recently Completed Doctoral Studies, Home

    It appears to me that the issue about language and CSR addresses how CSR strategies are communicated by the hierarchy. Identifying interest in social and environmental concerns should be a team effort - having representatives from every level of the organization participate in the decision-making process to enable full understanding of the purpose. In doing so, it is important to emphasize that the benefits from CSR are twofold - good for society and the environment and good for the organization - competitive advantage. CSR essentially provides the best results when a cause is identified as a long-term investment through philanthropy.

     
     
     
    • Michael Morris
    • Faculty, Michigan State University

    The ideas in the above article simply bristle with variables, so deductions by the named researchers are hardly generalizable. Clearly, as in all communication (corporate or not), how language is chosen AND how it is delivered does have impact, BUT how it is read, heard, perceived has at least equivalent impact. One interesting point is the high proportion of Industrialized-East-Asian names among the rsearchere mentioned in the article. Now THAT says something!

     
     
     
    • Petra Bauer
    • Europe

    Neither in Belgium nor in Switzerland (3 and 4 national languages, respectively) can you get by, throughout the small country or even just within the capital, by speaking only one of the official languages. Hence: poor choice of examples.

    The only reasonably bi-lingual country in Europe is the Grand Duchy of Luxembourg (German, French and Luxemburgish dialect).

     
     
     
    • Kapil Kumar Sopory
    • Company Secretary, SMEC(India) Private Limited

    All need to seriously understand the importance of using language which clearly conveys what is meant to be conveyed so that no ambiguities arise. We often come across expats who speak as if they were talking to people in their own country. This leads to lot of inconvenience to decipher their messages easily. At times, this leads to misunderstanding as well. As far as writing is concerned, besides using proper words, correct grammar and proper punctuation is necessary. CSR is not the same in all countries. In India, only now has the Government made it mandatory for a class of companies to expend on specified activities. However, here too, some of the listed activities convey varied interpretations. Hence a bit hazy !

     
     
     
    • Yasmina Mata
    • Indpendent Consultant

    Did companies with more presence in different countries scored less in corporate social responsibility than those with a more local approach?

     
     
     
    • Konstantin Joanidopoulos
    • Software Manager, Carl Zeiss Microscopy

    I share the idea that the language we speak influences the way we think and have speculated repeatedly about indicators that could confirm this assumption. This interesting article seems to provide some surprising evidence. But I would be cautious to classify German as a "low FTR" language. As far as I know this only applies to colloquial German (Heute regnet es. - Morgen regnet es.). Grammatically correct German shows a relatively strong FTR similar to English (Heute regnet es. - Morgen wird es regnen). Christopher Marquis' research indicates an interesting correlation that's certainly worth to be further investigated but I would be very cautious to interpret low CSR awareness as a causal effect of high (colloquial) FTR.

     
     
     
    • Dr Elsie M Calitz
    • School Principal/Owner, Regio Centurion Skool

    Language is even more important6 than what we used to think. Focusing on the future is, to me, extremely important in education.

     
     
     
    • JSM
    • Analyst, WBG

    What about the subjunctive ?!

     
     
     
    • PIETRAC Eric
    • HR VP, Subsea7

    In global companies, we all speak now English, a poor English. I am quite sure we loose a lot of "intelligence" in what is expressed.

     
     
     
    • Reza Putra
    • Copywriter, Putera Sampoerna Foundation

    Could the disputable language family affect the FTR classification? E.g. Western Malayo-Polynesian as in Malay and Indonesia.

    Language may contribute to your conclusion, but I think other cultural products should not be ignored -- your sixth paragraph can take this further. If the weak FTR makes people to be more future-oriented, Indonesia shouldn't fall into the most corrupt countries list.

     
     
     
    • Gudtorm Ervik
    • Director M&A, Norsk Hydro ASA

    Interesing perspective on Corporate Social Responsability! You may be on to something, but there is a way to go.

    First, environment will infuence language (not only the other way around, as implied by your introductory statements). You will see similare vocabular variations in other languages along the polar circle, such as the large number of words for describing raindeer in the sami language; it has been useful for them to have a detailed perseption of the raindeer.

    Secondly, there may be more easily accessible indicators than CSR to evaluate the impact of FTR; e.g. savings rate in an economy (ref. your own example).

    Thirdly, it would be iteresting to see analysis of different countries with same language and difference between language groups.

    Keep up the good work!

    Best regards, Gudtorm

     
     
     
    • Anonymous
    • auzdlqxpubg@gmail.com, http://navigatory.ru/index.php?option=com_smf&Itemid=5&action=profile;u=303409

    A terrorists attack can raise the prospect of a war. A war and even the powerful possibility of a war can lessen the interest in a currency, due to the truth a war drains the economy. Wars are pricey and really should be compensated via the citizen. You just can not possess a increasing economy all through war time. So war reduces the need to have for a currency.