Critically evaluate the advantages of a culturally diverse workplace

University Degree Business and Administrative studies

Critically evaluate the advantages of a culturally diverse workplace!

“Building a diverse, talented, and committed workforce is key to our success” (Web 1) says Rosalind Cox, manager of diversity and worklife planning at Ford. Ford is not the only company which concentrates more and more their efforts on establishing a culturally diverse workforce. It can be observed that companies throughout the world

are increasingly emphasising the need for and the advantages of workplace diversity.

In the past, however, employers were seeking to build a homogeneous workforce, that means similarities between employees were of prior importance. Therefore it is legitimate to ask for which reasons this change in attitude has taken place and whether potential advantages of a culturally diverse workplace are linked to this reasons.

This essay searches for answers to these questions and examines potential advantages of a culturally diverse workplace in a global business world. The essay

starts with an explanation why cultural diversity affects already nearly every society followed by a short discussion about what constitutes cultural diversity and thus a culturally diverse workplace. Next, potential advantages and disadvantages will be examined before concluding that advantages in a culturally diverse workplace can only arise when recognising and utilising cultural diversity adequately.

The trend towards globalisation has accelerated during the last decades. The establishment of the European Union and the NAFTA are indicators for the diminishing barriers to trade; foreign investment facilitated by trade liberalisation and the general trend towards global deregulation has led to a tremendous increase in cross – border economic, technological, social and cultural exchange. (Web 2)

Companies have become “global players” establishing subsidiaries in various countries and / or forming cross – border alliances such as joint ventures or mergers. Global deregulation facilitated free movement of labour. The ongoing development of systems of transport, as cars, air travel, trains and so on enhanced the mobility of people. Companies acting on a global scale are sending their employees on overseas assignments working side by side with people of different national origins. Besides, we have culturally diverse populations as a result of the flow of immigrants and refugees towards industrialised countries seeking for a “better life”. Consequently the composition of the society within countries has become increasingly diverse and is segmented in distinctive groups forming subcultures. Today, the multicultural society is rather the norm than the exception.

However, the term “culture” is not necessarily restricted to national origin and thus national culture. Culture defined as a “shared system of attitudes, beliefs, values and behaviour” (Davies, 2004) implies that within national borders subcultures appear also in form of gender, lifestyles, religion, age or sexual orientation to name just a few ones. Women, for instance, share different attitudes, beliefs, values and behaviour in comparison to men and have therefore an own culture. However, some as Fitzgerald (1997, p. 1), argue that these groups represent rather identities “which do not constitute separate cultures”. Thus, according to this point of view the definition of a culturally diverse workplace would have to exclude these characteristics forming distinguishable groups in societies. On the other hand, it is for sure that these specific groups contribute to diversity within society when defining cultural diversity as different existing systems of attitudes, beliefs, values and behaviour. Recognising this fact is important as the whole society represents the potential workforce and not just particular groups of national origins.

Since most managers refer to culture as “the collective programming of the mind which distinguishes the members of one human group from another....the interactive aggregate of common characteristics that influence a human group’s response to its environment” (Hofstede, 1980; di Stefano, 1972, cited by Adler, 2002, pp. 16, 17) and consequently the way of feeling, thinking and acting (Hofstede, 1997, p. 4) this paper is also going to adapt this view. Acknowledging that even this definition does not exclude gender, age, lifestyles etc. as representing forms of specific cultures within a country, this paper is going to concentrate on national cultures. One reason for this approach is that regardless whether referring to these specific groups as subcultures or as identities they are living or have been grown up within a particular country with a particular national culture which is likely to have shaped their ways of feeling, thinking and acting as the most dominant culture. (Hofstede, 1997, p. 4)

Furthermore, when we are talking about a culturally diverse workplace in a global business world the first thing which comes to our mind are different nations and national cultures which are involved with each other.

The above discussion already indicates that depending on what we regard constitutes culture one might use a narrower or broader definition of diversity in this context. This might be the reason why there is not a commonly accepted one. (Bhawuk et al.,1996)

Cultural diversity as a broad concept can be described as the “[...] variety of human experience and achievement [...]” (Web 3) and in this broad context culturally diverse people are referred to as “individuals who bring unique perspectives or outlooks to the organization”. (Web 4)

However, we will use a more neutral definition of a culturally diverse workplace. In accordance to the above mentioned definition of culture we will refer to it as one where people with different “mental programs” (Hofstede, 1997) resulting from different national origins are interacting and involved with each other.

According to a worldwide IBM research covering over 2000 companies carried out by Sparrow, Schuler and Jackson (Joynt and Morton, 1999, p. 207) most managers and businesses believe that achieving a sustainable competitive advantage is determined by an organisation’s people. In addition, the capturising of specific knowledge and skills in order to carry out research and develop new products for customers is seen as key success factor. (Dakhli et al., 2002, p. 2)

Globalisation implies that marketplaces both domestically and globally become more and more competitive and the ability to provide innovations can therefore determine fall or success. The increasing importance for global businesses to establish a culturally diverse workplace and thus an international team has to be understood in this context (Joynt and Morton, 1999, p. 208): a large number of experts agree that building heterogeneous working groups, that is to say teams with members who have different “mental programs”, are likely to be more innovative and creative (Dakhli et al., 2002, p. 1) and that the more different “mental programs” in the group exist the more distinctive their knowledge, points of views and ways of thinking are supposing that this leads to improved performance. Similarly, Wanous and Youtz (1986, cited by Ely and Thomas, 2001, p. 3) found heterogeneous groups more capable to establish diverse approaches to tasks and solutions to problems which in turn is believed to result in a higher quality in decisions. But why do mental programs differ from one another and if so do they really ultimately lead to innovations, enhanced creativity or better decisions?

This is a preview of the whole essay

We know that cultural diverse people have been grown up and educated in different nations. Values which are historically derived are lying in the heart of every national culture and embedded in nearly every aspect of life (Hofstede, 1997, p. 8) as economical, social, political or educational systems. Each member of a nation grows up with these particular underlying values which become internalised and both an integral part of our sub consciousness and consciousness driving our ways of feeling, thinking and behaving. Therefore, when cultures show different degrees of adherence to certain values it can be estimated that the ways of feeling, thinking and behaving will vary across cultural borders and ultimately lead to different points of views, knowledge and perspectives. Hampden –Turner and Trompenaars (2002, p. 1) support this idea by stating that “[....] cultures have always been reflections of the world mirrored in the eyes of members [....]” and result in “[....] reversals of the order and sequence of looking and learning.”

However, this does not necessarily imply that a cultural diverse workplace results also in higher innovative and creative outcomes. In fact, regarding the performance of culturally diverse workgroups there are existing opposing views in the literature. Jackson (1992, cited by Dakhli et al., 2002, p. 2) for instance, found that in heterogeneous groups conflicts and therefore less cohesiveness are more likely to appear than in homogeneous groups which in turn affect negatively the group performance. Conflict might arise when the work group is not aware about their different mental programs which in turn might result in a lack of tolerance and understanding for the other’s behaviour and attitude. It is believed that being confronted with another culture confirms us in our own identity (Hofstede, 1997, p. 211) as each culture regards its “way of doing things” as normal and as the best way. Consequently the other’s way of doing things might be perceived as alienated and strange which causes mistrust as pointed out by Adler (2002, p. 142). Human beings tend to prefer similarities as they give them a sense of protection and understanding rather than differences which might frighten them. Therefore, group members might prefer having contact with those who show similar characteristics to oneself avoiding contact with those who do not which was also found out by Byrne (1971, cited by Dakhli et al., 2002, p.8).

This in turn might result in the emergence of subgroups, that is to say the entire culturally diverse group reorganises itself in cultural homogeneous groups. In such a case cohesion would be diminished which consequently constrains the desired benefits of a culturally diverse group since it is said that gaining a competitive advantage by establishing a multicultural workforce is fundamentally dependant on the employees’ ability to learn from each other through mutual exchange (Ely and Thomas, 2001, p. 3) which is not possible without cohesion.

Nevertheless, the former discussion also implies that it is possible to gain advantages of a culturally diverse workforce when a company and its workforce are aware about existing cultural differences which in turn indicates that it is first necessary to know in which way and degree cultures differ from each other. For this purpose Hofstede (1980) provided a commonly accepted framework in which he identifies the nature of cultural differences in values, particularly towards work – related issues. He was able to determine four key dimensions to which a fifth one was added by Bond in later research. (Cole, 2004, p. 129)

These dimensions include individualism versus collectivism which describes the degree to which the culture relies on the self or the group, uncertainty avoidance which refers to the extent of tolerance for ambiguity or uncertain situations, power distance, that is the way cultures are accustomed to deal with inequalities among people, masculinity versus femininity which determines cultures to fit in the first category when preferring assertiveness and materialism and in the latter one when emphasising relationships and welfare for others. The added dimension refers to long-term versus short-term orientation, that is to say the degree on which one culture relies on the present or the future. (Hofstede, 2001; Cole, 2004, p. 129)

This framework allows categorising cultures, evaluating in which way and to which extent they differ from each other and identifying which potential strengths and weaknesses (Joynt and Morton, 1999, p. 213) single cultural diverse employees have as a result of their mental programs which they carry and contribute to the organisation. That is to say, the recognition of cultural differences in values might allow identifying distinctive characteristics which, if managed adequately, could contribute to the effectiveness of the group and improve the overall business performance.

Distinctive advantageous characteristics could be recognised when interpreting cultural dimensions adequately as in the following example provided by Hofstede (1997, p. 240) in which he illustrates potential competitive advantages of different cultures:

(Source: adapted from Hofstede, 1997, p. 240)

In low power distance cultures it could be estimated that employees are more involved in decision – making processes as an effect of decentralisation of authority (Davies, 2004) and a higher appreciation for equality among people. This implies that people are given more power for individual decision – making and thus responsibility whereas in high power distance cultures authority tends to be centralised and employees are more directed by the leaders of an organisation. (Hofstede, 1997, pp. 35, 36, 37)

These people might therefore have a greater need for obtaining instructions and tasks to fulfil. At the same time, as they are used to an authoritarian style they might show a great respect for authority and follow the given tasks and instructions with the utmost care which expresses a disciplined behaviour. Being aware about these differences can be useful when it comes to the composition of a multicultural work group: a person with acceptance of responsibility is more likely to fit in a leading position whereas a disciplined person is reliable and can ensure, for example, to keep time schedules. Joynt and Morton (1999, p. 192) point out that cultural diverse group members need to understand their group roles which should correspond to their skills and accommodate their mental programs in order to achieve group effectiveness. That is to say, the selection of the right group members for the right positions becomes a prior importance for gaining advantageous outcomes.

Having group members which show both low and high uncertainty avoidance could turn out to be a competitive advantage for companies in the development of new products for example. Following Hofstede’s point of view low uncertainty avoidance cultures tend to be more innovative as the “unknown” is not perceived as being threatening. Therefore, they might be more encouraged to search for new ideas. Nevertheless, this high motivation for developing new ideas could result in neglecting or overseeing single issues which might negatively influence innovations resulting in failures or low quality. High uncertainty avoidance cultures by contrast tend to have a greater need for control and structures. In order to be able to control situations they prefer thorough examination and analysis. This imposes the idea that there is a high degree of precision in work processes. The commitment of failures in the development of new products might be therefore considerably reduced or discovered at an early stage. Combining these two cultural dimensions in a product development department might lead to new high quality products and thus could contribute to higher productivity in a company.

In this case the company would have gained an advantage through cultural synergy which is “[...] the behaviour of whole systems that cannot be predicted by the behaviour of any parts taken separately [...]”. (Fuller, 1981, cited by Adler, 2002, p. 116)

Adler (2002, pp. 107) argues that the prerequisite for achieving cultural synergy is the recognition of cultural differences within the organisation. In this context gaining real synergistic effects might considerably depend on how it is dealt with these differences within the organisation which renders the role of leaders of vital importance as they can ignore, minimise or utilise them. (Davies, 2004)

Utilising them in the right way might turn out to be beneficial as shown in the above example whereas ignoring them can be a waste of potential resources or even worse, it could result in reduced business performance as shown in the merger of the German Daimler – Benz with Chrysler Corporation of the United States in 1998 to form Daimler – Chrysler Aktiengesellschaft.

It was proclaimed as “one of the most significant events that we have seen in the last 50 years or even more years” by Cole. (Web 5)

However, Daimler-Chrysler has not yet achieved the expected profitability and continues to struggle in their performance. Cultural issues may have a vital impact on this slight performance. The company is basically run from Germany. The Management board consists exclusively of Germans with Jürgen Schrempp as the German Chairman and CEO of Daimler-Chrysler. (Web 5)

The company has 362,100 employees – Germans and Americans.

Hofstede’s cultural dimensions (2001) show differences between these two nationalities regarding individualism versus collectivism. The USA has the highest index score for individualism and a low one for uncertainty avoidance whereas Germany is also individualistic but less than the USA. It has a relatively high index score for uncertainty avoidance. In fact, it is well known that Germany has numerous laws and regulations for nearly every situation. The setting of laws and regulations in order to avoid uncertainty expresses also an appreciation for having control. Americans, in contrast, are more used to living with uncertainties. For example, they are known for having a “hire and fire culture”,thus they are accustomed to loosing jobs. Hofstede found that individualistic countries with high uncertainty avoidance tend to show antagonism against minorities and a lack in the relationship dimension. In the Daimler-Chrysler example it could be argued that the Americans represent the “minority” in this merger. The composition of the Management Board reflects the dominance of the Germans. Having dominance in a collaboration may influence the willingness for cooperation and thus the relationship between the partners. The dominant partner may oversee or even ignore the other’s differences which may lead to an ethnocentric approach to the merging strategy. The highly individualistic character of Americans indicates a need for independence and autonomy. This, for example, is reflected by the fact that they are given more responsibilities in individual decision- making whereas in Germany important business decisions are mainly subject to top management (Davies, 2004). This in turn, reflects the high uncertainty avoidance and the German’s high sense for control. When an American person works for a German the result may be that the former may feel suppressed – he is likely to have less freedom in decision – making, for example. This feeling of suppression may lead to a worse work performance.

Marx (1999, pp. 99, 100) argues that the different attitudes in the American organisational culture and in the German one collide related to attitudes towards pay and benefits for their chief executives. This is because Germans are more focused on equality in pay, which reflects the more collectivistic approach in Germany, while in the U. S. payment is more dependant on individual performance.

Significant series of events after the merger may be a result of these incompatible business cultures: many senior Chrysler key executives departed (Marx, 1999, p.100) and significant losses in the U. S. Chrysler Group were reported.

It can be argued that this could have been prevented when both parties would have taken their cultural diversity seriously and analysed it in the attempt to find out where problems could arise but also what opportunities this diversity offers. On the other hand it could be for equally good reasons argued that relying too much on cultural differences could end up in stereotyping.

The Hofstede framework obviously stereotypes cultures which in turn might put obstacles to differentiated thinking about single individuals in the cultural diverse workforce as “a stereotype is an exaggerated belief associated with a category [...]” whose “[...] function is to justify our conduct in relation to that category”. (Allport, cited by Copeland, 2003)

Not every employee coming from a low uncertainty avoidance culture might tend to be innovative as well as not everyone from a high uncertainty avoidance culture might show a strong sense for precision, for example. This implies that cultural frameworks have to be used with caution when attempting to gain advantages from cultural diversity (Joynt and Morton, 1999, pp. 188,199) and awareness about stereotypes is necessary when judging individuals as well as assessing individual skills.

Having a cultural diverse workplace in a global business world can be an advantageous resource as international employees contribute the ability to speak different languages. This can be very helpful when operating in foreign markets. A company which is negotiating with a foreign company can seek the help of employees which might come from this country. Negotiation is a communication process through which we exchange meaning. Meanings are translated in words and behaviour. The receiver of the message will translate the latters back again into meaning. (Davies, 2004)

This process is highly based on the persons’ cultural backgrounds. According to these backgrounds different meanings will be attached to particular words and behaviours. The ability not only to speak but to really understand the language and thus the meaning prevents misunderstandings and misinterpretations. Involving employees in the negotiation who originally come from the country of the party with whom the company negotiates can thus be beneficial and reduce the risk of misunderstandings and misinterpretations.

Similarly, international employees can be helpful when marketing products across national borders. The use of humour in advertising campaigns, for example, is a very sensitive issue as what is perceived as being funny in one culture can be regarded as offending in another one. International employees having the necessary cultural background can prevent businesses from committing such failures which could otherwise result in high and wasted marketing expenditures. In this context it can be said that those employees who are closest in the way of thinking, feeling and acting to the way of the customers targeted by a company are also likely to be those who understand the best what these customers require. Since the success of businesses is highly dependant on understanding and satisfying the diverse customer needs having international employees with inside perspective can be estimated as being a vital competitive advantage.

Problem – solving might be facilitated as pointed out by Wanous and Youtz (1986, cited by Ely and Thomas, 2002, p. 3) and supported by Adler (2002, p. 109, 110). The different perspectives, styles, skills and points of views might enhance the ability to discover and solve problems quicker when having cultural diverse employees than when having homogeneous which Sullivan expresses well by stating ”when you are surrounded by sameness, you get only variations on the same.” (Web 6)

For the same reasons a company could gain more flexibility as alternatives are more easily provided for changing situations.

But nevertheless at the same time particularly these advantageous resources might lead to problems when decisions have to be taken, that is to say when one single agreement has to be achieved. The different points of views, attitudes and perspectives enhance the complexity and could contribute to confusion among group members. (Adler, 2002, p.109)

When decisions have to be taken it is necessary to compromise attitudes, points of views and beliefs. This implies that diversity in this aspect has a more challenging character for companies. Taking decisions requires close interaction between the cultural diverse group members and the converging of meanings. (Adler, 2002, p.109)

Consequently communication becomes once again of vital importance. Not being able to get the right meaning of the words expressed by foreign colleagues can result in misinterpretations and stereotyping. This can be for example the case when low context cultures and high context cultures are confronted with each other. In the former ones information is given explicit and precise whereas in the latter ones information is implicit and words have deeper meanings, that is to say they are put in a higher context. (Tayeb, 1996, p. 56, 58)

Employees being accustomed to low context communication might become confused or might even judge their counterparts coming from high context cultures as incompetent to examine a given situation thoroughly. They might perceive them as not discussing the matter because of their less precise choice of words. As the team might not really understand each other discussions could result in lengthy discourses and frustration could arise. This in turn would negatively affect the performance of the group and result in reduced productivity.

This discussion implies that homogeneous groups find more easily a consensus and that decision – making is less time – consuming. Nevertheless, this does not automatically imply that the quality of the decisions is also higher. It can be argued that when misunderstandings and conflict can be overcome and therefore the barriers to mutual exchange of ideas are diminished decisions might result in high quality outcomes which supports the view of Wanous and Youtz (1986, cited by Ely and Thomas, 2001, p. 3)

Differing attitudes towards ethics might also cause problems as in the following example (Copeland, 2003) where a new foreign employee wanted to thank her manager for having been chosen for the job by given him a present. The manager rejected the present explaining that this contradicts to the company’s policy. The employee felt offended and quit the company. In this case the company could have lost a skilled employee because of different attitudes towards ethics.

The above discussion leads to the following implications: a cultural diverse workplace in today’s global business world can give vital opportunities for companies if diversity is managed adequately. Cultural diverse employees are an important resource as they can provide a company with specific skills and insight perspectives which in turn can enable a business to operate efficiently in foreign markets. Nevertheless these opportunities remain useless if leaders and managers lack for cultural sensitivity, that is to say ignore cultural differences instead of utilising them to gain potential competitive advantages. Furthermore cultural diverse employees need also awareness and tolerance for their counterparts in order to gain synergistic advantages and avoid misunderstandings and stereotyping. The absence of an effective diversity management can lead to negative outcomes such as time – consuming decision – makings, low employee morale, frustration and confusion which in turn put constraints on creative and innovative thinking reducing profitability and market share. But successful management of a cultural diverse workplace can result in innovations, enhanced creativity and flexibility, facilitated problem – solving, high quality decisions, higher productivity and thus in a highly competitive positioning of a company in a global business world.

References

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Davies, S., Lecture 19.10.2004, Communication.

Davies, S., Lecture 09.11.2004, USA – Business Behaviour.

Critically evaluate the advantages of a culturally diverse workplace

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