The concept of globalization has greatly widened the trade internationally and made more contacts between the firms that work in different linguistic and cultural backgrounds. Multinational companies often deal with partners, employees as well as stakeholders with varying language backgrounds as a result of which communication has become difficult in global businesses. The communication barriers have frequently been the cause of misunderstanding in a negotiation, postponement of decision making and lack of efficiency in organizational coordination. These issues have raised transaction costs and made international trade not very efficient. Hence, the study of the contribution of business communication in the management of linguistic diversity has gained more significance to multinational corporations. This paper has attempted to discuss the role of communication barriers in transaction costs in multinational companies and explore the role of well-organized communications strategies in enhancing coordination in the international markets. The study has taken the qualitative research method, based on secondary data gathered through scholarly research and international business literature concerning communication management and international trade. The results have revealed that linguistic diversity plays a key role in determining the effectiveness of communication in multinational organizations. Those firms who incorporate formal communication networks, uniform organizational language policy and cross cultural communications training have shown better coordination and less operational inefficiency. The research has thus indicated the need to have strategic communication management in improving efficiency and competitiveness in global trade.
Dipikaben Solanki (Fri,) studied this question.
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