This paper presents a comprehensive discussion on the cultural diversity and its impact on the organizational performance and management practices. The paper includes a methodical analysis of the influence of culture on operational performance of an organization and the working patterns of individuals. A logical criticism has also been done on the relevant theories and concepts that are widely practiced in the business world.
Cultural diversity refers to the differences of cultural backgrounds, religious beliefs, social norms, races, and other dimensions among individuals. Cultural diversity is widely seen in large societies and multinational organizations. Due to its importance in today's challenging and complex business environment, organizations are giving more focus on managing cultural diversity in their workplaces. A number of research studies have been conducted which explain the importance, challenges, and issues of cultural diversity for business organizations. The most important studies are conducted in the late 20th Century -- Hofstede's Five Cultural Dimensions being the most studied and criticized among all. These five cultural dimensions include Power Distance, Masculinity vs. Femininity, Individualism vs. Collectivism, Long-term vs. Short-term Orientation, and Uncertainty Avoidance. The criticism on these dimensions is done by various researchers including McSweeney and Kreiser.
This paper presents a comprehensive discussion on the benefits, challenges, and issues related to cultural diversity at the workplace in the light of relevant and recent research studies. The major sections of the paper include: a brief introduction to the cultural diversity at the workplace; an overview of the culture and related theories; an analysis of how cultural influence may impact upon organization operations and management approaches; the impact of individual cultural backgrounds; and critics on the cultural theories by modern researchers.
The major focus of the paper is towards discussing the cultural theories and concepts with a wider description of the cultural diversity at the workplace. The paper has been written for a Thailand-based multinational organization, Minor International as an illustration for the cultural diversity management practices in the business world. The different sections of the paper have been discussed with examples of cultural diversity management practices from this organization.
Cultural diversity, often called multiculturalism refers to the differences in cultural values, beliefs, religions, races, and other dimensions among individuals in a society, workplace, or a country (Kandola 2008). Cultural diversity is being widely observed in the societies and workplaces due to Globalization and movement of rural people to urban areas in a view to find better employment opportunities and live with a better standard of life (Jackson 2011).
DIVERSITY AT THE WORKPLACE
Cultural diversity is largely seen at multinational organizations that set up their business operations in foreign countries and hire individuals from those countries to meet their workforce requirements (Kandola 2008). When MNCs expand their operations as a part of their international growth strategies, they have to hire individuals from target countries and their neighboring countries (Oslond & Biid 2000). These individuals differ from the local workforce with respect to their cultural values, races or color, religions, and social norms (Levy, Taylor, & Boyacigiller 2010). The employees which are hired form the home country are called parent country nationals (PCNs) or expatriates (Seymen 2006). The employees which are recruited from the target countries are called Home country nationals (HCNs) (Sako 2006).
If the employees from parent country and home country are not sufficient to meet the human capital requirements for the international assignment, the organization also recruits new employees from third neighboring countries (Pathak 2011). These employees are called third country nationals (TCNs). Since the new workforce is composed of individuals from three or more different countries and cultures, the organization experiences cultural diversity at its workplace during its entire international business assignment (Sako 2006).
If the company enters into an international market as a part of its business growth strategy, then it has to formulate a full-fledged cultural diversity management policy for its diverse workforce (Seymen 2006). Some organizations run different cultural diversity management programs that primarily aim at managing the diverse employees in an effective and efficient way so as to achieve the long-term goals without facing any diversity issues (Jackson 2011).
Cross Cultural Management:
Due to the complexities which are brought by cultural diversity in the workplace, cross cultural management has become a critical issue in the contemporary business world (Klett 2010). Organizations make every effort to manage their culturally diverse workforce so that their business operations keep running in an effective and efficient way (Sako 2006). Cross cultural management -- if done effectively, can help an organization in strengthening its organizational culture and achieving a competitive advantage through its human resources (Oslond & Biid 2000).
HOFSTEDE'S THEORY OF CULTURAL DIMENSIONS
The Geert Hofstede's Theory of Cultural Dimensions describes the impact of national or societal culture on the individuals living in that country or society. The theory primarily focuses on evaluating the impacts of culture on individuals' values and behaviors with their coworkers, neighbors, and associated people. Hofstede proposed five dimensions of culture which can be analyzed for this purpose (Sako 2006). These are: Power Distance, Masculinity vs. Femininity, Individualism vs. Collectivism, Long-term vs. Short-term Orientation, and Uncertainty Avoidance. All these dimensions are focused on evaluating the national cultures with a view to find what individuals perceive different aspects of cultural values in their country (Hofstede 1993).
i. Power Distance:
The first dimension, Power Distance assesses the individuals' belief that power is equally or unequally divided in their society or country. In high power distance cultures, individuals support or oppose inequalities whereas in low power distance cultures, they collectively work for a fair and transparent power system (Pathak 2011). This dimension basically explains how individuals perceive and respond to the power inequalities in their culture. The power distance in Thailand is quite high which means that its citizens are more exposed to discriminations and inequalities at workplaces, societal relationships, decision making, etc. (Hofstede 1993).
ii. Masculinity vs. Femininity:
The second dimension, Masculinity vs. Femininity emphasizes on the emotional aspects of cultural values. According to Hofstede's Theory of Cultural Dimensions, Masculine cultures are more inclined towards competition, materialism, self-actualization. On the other hand, Feminine cultures give more importance to relationships, love, and care. Hofstede believes that masculine cultures are important for individuals that wish to achieve high aims in their lives (Kandola 2008). On the other hand, feminine cultures are important to respect the cultural diversity and social norms and habits of the society members (Hofstede 1993).
iii. Individualism vs. Collectivism:
According to this dimension, there are two types of individuals in every society. First, those individuals who are more concerned with their personal achievements and aims instead of the betterment of the whole community or society. These people are called individualistic in nature. On the other hand, there are collectivist people who give more preference and importance to the group efforts and achievement (Jackson 2011). If these dimensions are applied at a workplace, the more important of the two is collectivism. Reason being, a collectivist society is more focused on long-term and strategic goals (Dowling & Welch 2008).
The employees in a collectivist culture work for the success and prosperity of the whole organization (Seymen 2006). They subordinate their personal interests over the interests of their organization. In order to promote cultural diversity at the workplace, organizations should focus on collectivism (Hofstede 1993).
iv. Uncertainty Avoidance:
Uncertainty avoidance refers to the resistance and anxiety of individuals in a society towards the occurrence of unknown and unwanted events. In high uncertainty avoidance, society members try to avoid new things and prefer their routine tasks. On the other hand, low uncertainty avoidance gives more room for improvement and innovation (Hofstede 1993).
v. Long-term vs. Short-term Orientation:
A long-term oriented culture gives more importance to the future of the society or workplace whereas short-term orientation focuses on current goals and objectives. For an organization to be successful in its industry, the focus of employees should be on the long-term objectives (Pathak 2011). However, they also have to ensure that the short-term goals are achieved efficiently and effectively which pave the path towards long-term success (Hofstede 1993).
CRITICISM ON HOFSTEDE'S FIVE DIMENSIONS OF CULTURE BY MCSWEENEY
After the passage of almost one decade from the publication of Hofstede's five cultural dimensions, McSweeney presented his criticism on each of these dimension in 2002. McSweeney largely criticized Hofstede's cultural dimensions on their applicability to all kinds of cultures and workplace environments (Kinasevych, 2010). He argued that Hofstede's cultural dimensions cannot be applied to analyze all types of cultures either individually or collectively for the whole country. He presented his criticism on the explanation of national culture by Hofstede in his five cultural dimensions model (McSweeney 2002). He argued that Hofstede has completely failed to effectively define and explain national culture in his assumptions and has given more focus on explaining individual cultures (Levy, Taylor, & Boyacigiller 2010).
He presented a more refined model against the five cultural dimensions by Hofstede. In this refined model, McSweeney has given…