Strategic Decision-Making in a Global Context: The Comprehension Effect of Foreign Language Use on Cooperation.

VerfasserUrbig, Diemo

1 Introduction

Global business operations and an increasingly diverse workforce imply that an ever-increasing number of managers and employees are required to use languages other than their native tongue in the workplace (Frederiksson et al. 2006; Neeley 2012; Tenzer et al. 2017). However, many individuals fear that their comprehension of relevant information--that is, the extent to which relevant information is understood--might suffer when using a foreign language. Such an actual or expected lack of information can hamper inter-organizational and intra-organizational processes (e.g., Harzing and Feely 2008; Harzing et al. 2011; Neeley 2013; Neeley and Dumas 2016; Piekkari et al. 2005; Tenzer et al. 2014). Complementing these effects at the group level, using a foreign language also changes how individuals decide (e.g., Akkermans et al. 2010; Costa et al. 2014b; Keysar et al. 2012; Urbig et al. 2016). An emerging stream of research argues that foreign language use changes individuals' inclinations to engage either in intuitive and heuristic or in reflective and deliberate thinking (e.g., Costa et al. 2014a; Keysar et al. 2012; Urbig et al. 2016). However, these studies do not directly relate foreign language use to reductions in comprehension. Usually, they empirically ensured a complete understanding, thereby leaving aside the fact that a decrease in comprehension has been suggested to constitute the critical problem that triggers changes in thinking when using a foreign language (Alter et al. 2007; Costa et al. 2014b).

To advance international business and global strategy research, we develop and test a conceptual framework that explicitly focuses on comprehension. Drawing on dual-process theories (e.g., Stanovich 2009; Thompson 2009), which are often employed to explain behavior in foreign language contexts (e.g., Keysar et al. 2012; Volk et al. 2014), we propose that comprehension fulfills a mediating role. In so doing, we respond to calls to hypothesize more explicitly regarding the information extracted from a stimulus and to frame related triggers to deliberate thinking in terms of basic comprehension processes (Thompson 2009). We conceptualize comprehension as the extent to which the receiver of a message believes to have understood the information contained (McGrath 2001). That is, comprehension represents a state after having invested effort to understand a specific piece of information. While language proficiency and fluency that may affect comprehension have received substantial attention in research on foreign language and decision-making (e.g., Alter and Oppenheimer 2009; Hayakawa et al. 2016; Volk et al. 2014), comprehension as a distinct construct is less well studied. Concerning processes of understanding and re-contextualizing within communication across international, cultural, and linguistic borders (Brannen 2004), our focus is on the informational and uncertainty-reducing aspect of communication (Sullivan 1988).

For the empirical part of our study, we adopt an experimental design, specifically focusing on strategic behavior in the context of Bertrand price competition, which is a particular and, in business practice, a relevant instance of a Prisoner's dilemma. The Prisoner's dilemma mirrors strategic decision-making in many situations that feature a tension between individual and collective rationality (e.g., Boone et al. 1999; Jones and George 1998; Parkhe 1993; Tsai 2002; Zeng and Chen 2003) and it has been successfully employed in research on intercultural contexts (e.g., Akkermans et al. 2010; Cox et al. 1991; Tenzer et al. 2017). In our experiment, participants could opt for cooperative or competitive pricing in duopolistic price competitions. The experiment was administered either in the participants' mother tongue (Dutch) or in a foreign language. We took English as the foreign language, as this is a dominant language in international business, trade, and politics (e.g., Crystal 2003; Feely and Harzing 2003; Ku and Zussman 2010; Neeley 2012).

Our study contributes to research on how foreign-language use affects individual decision-making in two ways. First, our theoretical discussion of the role of comprehension identifies previously hidden conceptual ambiguities with respect to different and possibly opposing mechanisms that link foreign language use with individuals' decision-making in a global context. To better understand the effect of foreign language use on decision-making, we follow previous research on decision-making (e.g., Ellsberg 1961; Kahneman and Tversky 1979) and on decision-making in foreign language research (e.g., Hadjichristidis et al. 2017), explicitly distinguishing between information processing, which leads to more or less comprehension, and decision-making, which builds on the comprehended information. We emphasize that deliberate and reflective information processing, which can be activated by using a foreign language (Costa et al. 2014a), is more than intuitive decision-making associated with a high cognitive load (cf., Evans and Stanovich 2013). If information processing and decisionmaking compete for mental resources, then cognitive load due to more deliberate information processing might lead to less cognitive capacity available for decision-making, and hence to more intuitive rather than deliberate decision-making. Our conceptual focus on comprehension, which separates information processing from decision-making, and our consideration of the specific timing of these processes (cf., Hadjichristidis et al. 2017) in tandem enables us to demonstrate how foreign language use can be theorized to induce both less (e.g., Costa et al. 2014a; Keysar et al. 2012) and more (e.g., Takano and Noda 1993; Volk et al. 2014) heuristic thinking.

Second, empirically, we document conditional causal effects of foreign language use on both comprehension and cooperation with the direction of the effect depending on individuals' foreign language proficiency. Our finding that using a foreign language may increase comprehension when individuals are highly proficient in the foreign language provides evidence for the previously suggested deliberation-triggering effect of foreign language use (Costa et al. 2014a; Keysar et al. 2012; Urbig et al. 2016). While these previous studies mostly provide only indirect evidence based on interpreting related decision-making, this study focuses on the direct outcome of a more deliberate information processing, that is, an increase in comprehension. Furthermore, by demonstrating comprehension as an essential mediator of the relationship between foreign language use and individual behavior, we also introduce a new mechanism into the discussion of how language use affects information processing and decision-making in a variety of managerial settings, both in international business and in multilinguistic organizations. Considering information comprehension as a construct allows research on foreign language use to draw on and integrate previously neglected streams of research on decision-making, including, as we demonstrate, Ellsberg's (1961) work on ambiguity, which relates to comprehension through its reference to reliability and 'unanimity' of information that eventually affects their decision-making. Thereby, our study helps scholars and practitioners alike to deepen their understanding of the mechanisms and related effects of communication across linguistic boundaries in today's global managerial world.

2 Theory and Hypotheses

The use of foreign language in international business contexts is gaining increasing attention--see, among others, the review by Tenzer et al. (2017) and the special issue of the Journal of International Business Studies focusing on this topic (Brannen et al. 2014). Across various disciplines, researchers show that foreign language use affects individuals' decision-making (Costa et al. 2014a), including individuals' loss aversion (Keysar et al. 2012), as well as their ethical and social behaviors (Costa et al. 2014b; Geipel et al. 2016; Urbig et al. 2016). There are multiple mechanisms considered relevant in explaining such effects. Foreign language use may change the extent to which individuals base decisions either on intuitive and heuristic or on reflective and deliberate reasoning (Costa et al. 2014a; Hayakawa et al. 2016; Volk et al. 2014). In addition, reduced emotions and increased psychological distance are also discussed as possible mechanisms underlying observed foreign language effects. In contrast to studies comparing the explanatory power of different theoretical accounts (e.g., Hayakawa et al. 2017; Vives et al. 2018), we focus on the intuition-deliberation perspective (cf., Costa et al. 2014a; Hayakawa et al. 2016; Volk et al. 2014) and study the role of information comprehension as a crucial mediator between information processing and decision-making.

An individual's information comprehension refers to subjective evaluations of situations or stimuli (see McGrath 2001, for a related team-level definition). Comprehension is a crucial aspect of an individual's subjective belief about how reliable the information is which enters into a decision. Comprehension of a foreign language stimulus--which, for ease of exposition, we refer to as comprehension--results from an interplay of the individual-specific and stimulus-independent language proficiency with a specific and possibly difficult to understand foreign language stimulus. Depending on the ease with which an individual can establish a high level of comprehension, a foreign language stimulus might be described as being associated with a lower or higher fluency (Alter and Oppenheimer 2009). If an individual experiences high fluency across a large and diverse set of foreign language stimuli, we would argue this individual displays high foreign language proficiency. Whether or not an experience of low fluency results in low comprehension...

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