Come Close, Go Away: Code-Switching as a Tool in Managing Stakeholder Relationships

We take a socio-linguistic approach to understanding the dyadic co-constructive nature of how firms manage their relationships with stakeholders. Specifically, we propose that in light of a salient issue, firms attempt to strategically manage their relationships with particular stakeholders through the deliberate code-switching and code selection that is meant to signal their values and preferences for a change in relational distance. We further propose that the success of these efforts are dependent on stakeholder interpretations. We develop the concept of fluency in cultural codes through connecting this concept to the firm’s and stakeholder’s values and show how differing levels of fluency drive outcomes of communication efforts. Further, we demonstrate how and when inconsistencies between firms’ language and actions can drive relational outcomes in a dyad. We then identify specific code selection choices used by the firm to manage their stakeholder relationship and make propositions for outcomes that occur as a result of effective and ineffective execution of these tactics in combination with firm actions.