Mandating a common language in the multinational enterprise: The case of Cummins in India

Abstract

In this study, we answer the call for integrating insights from different language-related research areas in international business. We investigate the antecedents and outcomes of mandating English as a common language in the Indian subsidiaries and joint ventures of Cummins, a large US-headquartered industrial, multinational enterprise (MNE). Our Transaction Cost Theory lens shows how the mandated adoption of English significantly improved the Indian subsidiaries’ position in the MNE’s network. Through retrospectively analyzing the experience of the authors in top and middle management roles with Cummins in India and utilizing a range of publicly available information, we also identified the significant role of English in fostering inclusion in India, where the broad societal context of diversity and inclusion is very different from that prevailing in the MNE’s home country.