Strategies for Managing Diversity and Cross-Cultural Issues

In the current business world, where time and distance are not barriers, organizations run their operations across the globe crossing the boundaries by bypassing the limitations. The working environment of such organization is diversified, filled with people of different skill sets, culture, religion, language, ethnic, mentality etc. As this diversified team needs to work closer and as it needs collaboration for the smooth operation of business, it is critical to manage efficiently the cross cultural environment in an organization. In this essay we critically analyze how diversity helps an organization to be competitive in the global market, the cross cultural issues and the importance and how to manage diversity efficiently in an organization.

1. Introduction

Industries and organizations are fast growing with the help of innovative technologies. In the current business world, these technologies, the enablers, are helping the organization to expand the business across the globe crossing the boundaries of limits. As a result of this, the organizations environment is very much diversified with people from different countries, language and culture and so on. Organizations need to deal with people from this diversified environment. In the new generation business or service industry, even in a single project people from different culture or countries works together for the project completion. A close relationship between these people is very much essential for the uninterrupted continuation of the operations and for the successful completion of these projects. A small issue or fault in these relations could make a sever problem and the impact of the same on the organizations operations will be very high. So a cross cultural environment should be carefully handled for not breaking the thread of operation of an organization. The truth is that, there could be several cross cultural issues arising in an organization due to several reasons. So, in such situations a manager should need skills for managing the diversity in an organization as well. This skill is very much important as globalization has become more and more relevant than the past.

2. Diversity – An enabler for globalization

As the business is becoming more and more globalize, diversity in an organization is a competitive advantage for leveraging the opportunity of business globally (Zainuba 1998). A good management of such diversity can help in enormous improvement of team work and also helps in improving the productivity of an organization. Zainuba (1998) points out that multinational companies like GE, Honeywell, BankAmerica and lot more has kept diversity leaders as their senior level employees in their organization. Diversity also has huge importance as it helps in satisfying multi cultural clients of an organization and also helps to handle the diversified market place in the globalize environment. Companies who run their business in multiple companies face competitive issues. For understanding those markets and competitive issue, a cross cultural collaboration and understanding is very much important. Due to this reason many companies has kept their managerial level employees or top level executives in foreign countries to be from a different country or culture to understand the global business and to pursue the advantage of the market. For example, Colgate Company has kept an Australian as the top level executive for their European division operations. By doing like this these companies get a better chance to be competitive in the global market and helps globalization effectively.

3. Cross cultural issues:

It is obvious that when a diversified team work together, due to many reasons like language barriers, cultural difference etc, many issues may occur. But in any organization it is critical to analyze the cause of these issues and is necessary to find out what hinders the team work in such situations. Cultural difference is the major cause of the cross cultural issues in most cases in an organization. Hofstede (cited in Higgs 1993: 37) has identified four different dimensions which cause cultural difference or the factors which cause impact on the national cultural difference in an organization. Hofstede (1993) broadly classifies these dimensions as Individualism / collectivism, power-distance, uncertainty avoidance and Masculinity / femininity. The dimension individualism / collectivism represent the extent to which individuals are valuing their self determination which is as opposed to their behaviour, determined by collective will of organization. The next dimension which is power-distance also causes huge impact on cross cultural environment. Employee shows involvement in and also has a participative style of management in the low power-distance culture. The other side of this is that the employees always tend to accept and behave in certain ways as directed by the higher management hierarchy. Masculinity / femininity are considered to be one of the most difficult dimensions. There is always a high conflict between highly masculine cultural values and highly feminine cultural values in an organization. It is considered that the masculine culture values mostly related to material acquisition and assertiveness where as feminine culture values relates to the relationship and person and the quality of life (Higgs 1996). So these cross-cultural conflicts always tend to be high in a multinational organization. Uncertainty avoidance domain represents the employee tolerance of uncertainty in the work place. A research done by Higgs & Phelps (1990) on Japanese organizations operating in United Kingdom also proves the practical evidences of these dimensions. Magdaleno & Kleiner (1996) also points out that organizations behaviour and working environment is tightly coupled with the countries culture. They assert this point by giving examples of different organizations based in different countries like UK, Japan and Mexico. Magdaleno & Kleiner (1996) demonstrate that the cultural trend of United States organization is to become a part of melting pot, Mexican organizations always filters ascription and tradition into the work place, UK organizations are characterised by homogeneity and Japanese organizations promotes work opportunities for the women. So taking these cultural difference into consideration, when a company is operating in a global market across the globe where different people across the globe work together in an organization as a team, the chance of occurrence of cultural conflict is quite natural, but systematic and efficient management of this issue could be very helpful to increase the productivity as well as for innovation in the global market by leveraging the competitive advantage of diverse team in an organization.

4. Managing Diversity And Cross Cultural Issues:

Managing diversity in an organization has become the at most importance in this era of globalization. As we discussed earlier this efficient management is very much necessary to leverage the competitive advantage of the diversified team in an organization for achieving success and for the expansion of business through innovation. A study done by Aoun (2007) on international forum on managing the diversity revels the findings that diversity management has become the priority in most of the countries especially in work place and in institutions of higher education. A discussion between Lloyd & Trompenaars (1993) suggests that riding waves of culture is becoming extremely important in the corporate world and day to day lives as well. Kandola & Fullerton (cited in Maxwell et al. 2001: 468) says that managing diversity has its origin in United States of America. Maxwell et al. (2001) explains that this emerging importance of managing diversity was not only because of the widely spread demographic changes but also it offers equal opportunity approach. A research done by Schwabenland & Tomlinson (2008) revels that managing diversity could become inherently problematic when it comes to some organizations like non profitable organizations when involving the process of undermining and when organizations efforts to organize and manage by themselves. But as diversity gives sustainable advantages, it is necessary to manage it efficiently through different ways by adopting new strategies in the organizations. Friday & Friday (2003) points out that most of the current organizations implemented corporate diversity strategy but have not used planned change-corporate diversity. This could cause diversity initiatives to be ineffective. So a planned strategic management is necessary for efficiently managing diversity in an organization. Friday & Friday (2003) also asserts that planned change-diversity strategy will also help in long term effectiveness and this is extremely important for managing human resource in organizations with highly diversified work force. Friday & Friday (2003) also give systematic strategic management approach starting from strategic formulation, implementation and strategic evaluation. In strategic formulation we develop the mission, vision and the goal, conduct the SWOT analysis and also set the criteria for selection and then select the strategy. Then in strategic implementation phase we allocate appropriate resources and execute the strategy. In the evaluation process of managing the diversity, we set the control process, review and access the strategic execution and takes corrective actions when ever it is necessary. So this type of strategic management of diversity is very much important for ideally dealing with the cross cultural issues in an organization proactively. In general, in this strategic management for managing diversity, we are going through the process of Acknowledging diversity, valuing diversity and managing diversity. Friday & Friday (2003) also projects eight steps which contribute to the efficient diversity management. These are exposure, experience, understanding, respect, knowledge, appreciate, modifying attitudes and the behaviours and finally healthy interaction. These could help in maintaining a healthy diversified team in an organization. Exposure, experience, understanding and knowledge broadly come under acknowledging diversity. Under exposure we promote the practice of acknowledging a person to know who he is, where he is from, promoting to receive others culture, unmasking and public noticing. Under experience, we insist personal involvement, information gathering, living through, encountering and doing. Knowledge phase is almost similar to this. In understanding, it tends to grasp the reality, share unique insights and share perception. Now in valuating the diversity we go through two phases that is, Appreciating and giving respect. By appreciating we give high regards to others opinion, welcoming them and accepting the worth of their value and culture. By giving respect we need to give personal considerations, pay tribute to the value of culture, pay difference to person’s culture, Pay attention as well to the person’s culture and finally regarding a person’s value.

Higgs (1994) suggest certain tips for the efficient management of diversity in an organization. He suggests to built a strong corporate culture in the organization, adapt a strong human resource strategy and policy and then empower the subsidiaries of its own to adapt these strategies and implement it locally so that it cam meet the national cultural difference. He also suggests involving all locations globally for the formulation of such policies so that it supports corporate goals in a diversified environment. Higgs (1994) also suggests that for better management of diversity, it is necessary to identify the national cultural differences and its impact on a particular organization and the also necessary to develop an understanding of potential strength which influences corporate and the national culture with in an organization. Choy et al. (2010) stress the need of differentiated management approach which involves changing current management process. In differentiated management approach managers need to take a different managerial style which adapts to the business environment and the characteristics of multinational staffs. Choy et al. (2010) proves this with the example of established trade relation between China and Singapore where they needed to use differentiated management technique as these countries had different philosophies, political and cultural view for doing the trade. Also Janssens et al. (2004) points out the importance of diversity of languages and the importance of managing it by stressing the point that international organizations are multilingual organizations where language diversity needs to be organized for the effective diversity management. A case study on Siemens by Fredriksson et al. (2006) also proves the importance of managing diversified languages in a multilingual organization. In this case, Siemens subsidiaries in Germany and France preferred their native languages but managing those conflicts and promoting English as common language needed diversified management skills and was successful evidence of efficient diversity and cross cultural management. Diversity management becomes much more important in these situations as we cannot avoid these situations because it occurs frequently in globalization era. As we discussed earlier, managerial skills need to be shifted from an organization level to a global thinking, by practicing to deal with the multicultural and multilingual environment. This also includes the need of practicing the equal opportunity theory and to be implemented by the organizations. Many studies also proves that managing diversity is not only for diversified recruitment of staffs, but also giving equal opportunity for everyone globally by accepting and welcoming different culture and by rewarding for different successful aspects of different talents. These kinds of effective diversity management in an organization reduces the friction of national, cultural and even mental differences as well thus by giving way to a smooth operation of the business and by giving competitive edge for innovation and success.

5. Conclusion

In the present business world, due to the technology developments and innovation organizations and industries are fast growing. As a part of globalization, companies operate their business across the globe for expanding the business as well as to pursue the opportunity available in the world market. Such a working environment will be diversified with people from different countries with different philosophies, culture, language, gender, mentality, thoughts and lot more. For the successful operation of a firm globally, it requires a tight coupling between these people in an organization. For this tight coupling, a good relationship as well as trust is required. But chances of causing conflict in such multinational organizations are high. Instead of finding these conflicts as a negative impact on organization, we need to use the new trend of finding and utilizing opportunity from the conflict and need to leverage the competitive advantage of diversity which helps organization to expand business in the global market and to pursue success. For doing this an efficient management of diversity is required in an organization. Managers need to think about the diversified management of the diversity rather than the old management styles followed in the organizations. This diversified management should focus on the principle of giving equal opportunity to everybody. This should also involve the process of understanding, accepting and respecting everybody thoughts and aspects. Companies should hire diversified team for higher as well as middle level management to understand and leverage the opportunities in the market by using the experience and knowledge of these diversities. This could help organizations to root their business in other countries by a better understanding of their culture. Companies should also focus on developing a common human resource strategy and policy for everyone in the organization. Companies should also include every body’s thoughts and opinion while developing these policies for better outcome. An efficient management of diversity will allow reducing or even avoiding the friction caused due to cross cultural issues. An efficient management of diversity could also help an organization to better understand the national difference and this will better help an organization to establish business across globe with out much issues. As a part of diversified management, companies should also give importance to language differences and need to try to make a common language. This is because most of the multinational organizations are multilingual. In general, diversity management has become the at most important process in an organization as it is directly linked with the companies strategic goals and success in the current globalize business world.