Russian Businesses Losing Out Due to Language Inadequacies

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May 3 – Cultural differences and linguistic barriers are keeping Russian companies from expanding internationally, according to research released on Tuesday.

Unfamiliarity with foreign mores and a poor command of languages are perceived to be obstacles to global business success by 89 percent of Russian companies surveyed by the Economist Intelligence Unit and language-teaching firm Education First in a report titled “Competing Across Borders.”

The report, conducted in February and March 2012, showed that 49 percent of Russian respondents admitted that their companies had been hit by financial losses as a result of linguistic and cultural difficulties — 6 percent higher than the global average.

Approximately half of 572 respondents (47 percent) were C-level or board level executives, and over one-half (53 percent) were from companies with annual revenues in excess of US$500 million.

The level of mistrust in translations was also greater in Russia where 36 percent said they suffered from poor translations compared with 23 percent worldwide.

Just 36 percent of companies headquartered in Scandinavian countries felt restricted by cultural and linguistic differences while the figure was 55 percent in the United States and 62 percent in Britain. The global average was 64 percent.

The survey indicates that 61 percent of companies admit to encountering difficulties at least “sometimes” when communicating across borders.

The report shows that companies have clearly recognized the impact that cross-border collaboration and communication with clients and colleagues from different countries, cultures and time zones can have on their fortunes. Sometimes it can mean the difference between success and failure.

As it says in the report’s conclusion, senior executives and management experts surveyed for the research have made it clear that the task of overcoming cultural and linguistic barriers is a difficult one, but not impossible.

“There is a real tension between the awareness of a gap in language skills and the actual implementation of policy,” said Christopher McCormick, vice president at Education First.

This divergence between understanding the problem and trying to implement a solution is often a result of complacency and short-term thinking, said Abhik Sen, who led the research for the Economist Intelligence Unit.

Participants at a round-table discussion at Education First’s Moscow offices on Tuesday also highlighted another trend. Both Russian and foreign companies rate the need for languages very highly but are unwilling to do much to resolve the issue.

Even worldwide, many companies appear not to be doing enough to mitigate cultural and linguistic differences, the report says.

Globally, learning Russian is not considered much of an asset for companies seeking to expand internationally over the next five years. Just 3 percent of international respondents said it was a language crucial to their overseas growth plans.

English is the one language which companies expect their workforce to know in order to succeed on an international scale. Almost 70 percent consider English to be essential, followed by Mandarin (8 percent) and Spanish (6 percent) as the next most popular languages.

“I am convinced that the vast majority of economic and social problems should be solved jointly by government and business,” says Albert Gilmutdinov, minister of education and science of Russian Republic of Tatarstan.

“For example, Tatarstan has recently implemented a number of educational programs and modules aimed at foreign-language training for public servants. This is not only to improve their skill sets, but also to improve the quality of service that foreign business people receive in our country.”

Meanwhile, only 0.1 percent of Russian officials currently study abroad each year, and a meager 0.5 percent of senior bureaucrats have graduated from foreign schools and colleges.

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