Diversity can be a few things; it can be differentiations in race, tradition, customs, faith systems, physical forms, mental capabilities and so forth. Diversity should be cared and respected since no one is totally the same as anyone else, even with the categories already stated. Every person's differences/diversities can lead to development as a culture or it can lead to violence and hatred.
2.2 Importance of Diversity
Although diversity can generate some troubles and challenges for a multinational organisation, it also can present incredible benefits. Furthermore, diversity in legal terms is continuing to be an inspiring factor inside multinational organisations seeking to get employee diversity, profits, and lastly long-term triumph will become the new motivators. Telling managers and employees on how to work successfully in a diverse setting helps multinational organisations evade discrimination and encourage inclusiveness within each person. Facts have shown that managing a diverse workforce well can add to increased staff retention and efficiency. It can expand the multinational organisation's responsiveness to a progressively more diverse world of customers, develop relations with the neighboring community, increase the multinational organisation's ability to cope with change and increase the creativity of the multinational organisation. Good management of diversity can boost productivity, increase innovation, and advance the multinational organisation's capability to plot in an increasingly competitive, difficult and diverse market.
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Santana (2003) considers that organisations that have bosses who are trained to effectively influence the distinctive and affluent talents and skills and knowledge of all employees will not avoid drains on profitability; in actual fact these organisations will actually reach several strategic benefits. It is essential for successful organisations to tap into diversity. Diversity generates creativity which then leads to innovations. For an organisation to be successful, the bosses and employees need to be able to innovate so that they can remain distinguish from the competition. If this is not occurring, the organisation will have a collection of 'commoditized' people that produce 'commoditized' products and services. The bottom line is basically the ability to manage diversity is exceptionally important to any organization. Good productivity more and more depends on effective running teams. A team that covers several diverse attributes individually, which comes together cooperatively can ignite creativity and innovation.
According to Alpert (1998) the top organisations, produces the most unity and respect for other group members, are not frightened to risk putting forth ideas and determined for improved practices and innovation. Creating and maintaining these organisations has made it much harder by conflicts and misunderstandings with involving cultural differences. In addition, organisations that bring together carried knowledge and viewpoints, have a higher likelihood of being more inventive and innovative. This results in the workforce becoming more diverse which then leads to the organisation for high productivity and effectiveness. Diversity can be a 'looking glass' through which, fresh ways of views about products, markets and innovation can develop. Advertising innovation and diversity efforts can develop organisational effectiveness.
Procter and Gamble CEO Pepper (2003) declared, "The success of this company is straight result of our diverse and talented workforce. Our capability to develop new consumer insights and ideas and to execute in a greater way across the work is the best possible testimony to the power of diversity any organisation could ever have.' Their success demonstrates that workforce teams that are more diverse in life create ideas that are better in creativity and in quality.
Moore (1999) concluded that decision-making groups that are characterized by a higher degree of diversity are more likely to create a bigger number of possible solutions and consider a superior number of options before finalising their decisions and such processes are usually linked with higher quality decisions. In addition to this, Carp (2004) stated that that attempting to build a commitment to diversity only on quantifiable dollars and cents lessens the importance of the attempt.
2.3 Diverse Global Market
There is a fast advancement of communication and information technology and increasing interdependence of markets, the concept of global learning has received considerable research attention over the last decades. The importance of global learning in the multinational organisations can be principally high due to foreign markets often provide access to innovative ideas and stimuli that can be subsequently applied to other countries. By having knowledge in different markets, multinational organisations are in an excellent position to capitalise on market imperfections and achieve higher returns on their investments. Several researchers argued that higher levels of global learning lead to higher multinational organisations performance.
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The mission of understanding diversity of the global market is predominantly huge. There are several things to consider for a multinational organisation such as political diversity, economic diversity, regional diversity, cultural/linguistic diversity and development diversity.
Another attribute influencing a multinational organisation and a vital factor for embracing workforce diversity is globalisation. Dessler (2004) suggested that globalisation entails that employers hire minority members with cultural and language skills. Employees from diverse backgrounds usually have this proficiency. As a result of people of all backgrounds, the multinational organisation will create a greater perspective on how different cultures function and employ these skills and traits for global market capability. Implementing diversity resulting from the growths of a global economy has proven to be favourable.
Belcher (2003) stated that the US has been devoted to achieving diversity ever since it was found in the late 1770's. The commitment to diversity in much of the US's phenomenal domestic and global economic is the reason for the success. The past has shown us that any country that encourages diversity is using a proven plan for succeeding in the global economy. Most multinational organisations will have wanted to learn how to be effectual in global markets. And, as more and more organisations of all dimensions fight in the global marketplace, organisations must display their dedication to diversity in strategic planning. In relation to this, recruiting and retention will be needed for developing improvements and to find new business markets and opportunities globally. Belcher (2003) also stated that with the number of minorities projected to come into the workforce within the next 4-5 years, multinational organisations will have to appeal to a diverse work group.
2.4 Managing Diversity
There are several ways to manage diversity; however it is very important that multinational organisations go about it in a certain method due to the rapidly changing global market. Moore (1999) acknowledged that a critical starting point for effectively managing diversity involves a keen knowledge of the different challenges faced by different people within the organisation. People who are 'different' from one another in terms of their age, gender, physical ability, socioeconomic background and so forth, are probable to have at slightest some stereotypes about one another and it is these stereotypical thoughts and view that many diversity training programs need to aim to tackle. Moreover, managers at all levels of the organisation need to educate themselves to guide employees on what notion of diversity means to the organisation.
2.5 Benefits of Diversity
Diversity creates several benefits to multinational organisations. Multinational organisations that implement workforce diversity policies identify important benefits that strengthen long-term competitiveness and, in certain instances, also produce short and medium-term improvements in performance. These benefits are shown in Appendix 1. Diversity provides options in life and helps prevent hard times and circumstances by allowing a person to be flexible in how to overcome obstacles instead of staying in the same trench without the ability to move out of it. Diversity brings sizeable possible benefits such as enhanced decision making and advanced problem solving, superior ingenuity and innovation, which leads to enhanced product improvement, and more successful marketing to diverse types of customer. Cole (2003) stated that not only does a strong multinational organisational commitment to diversity expands the organisations' talent pool but also improves the multinational organisations' ability to retain valuable employees. Appendix 5 shows the top 10 companies for diversity in 2008. These companies are very successful and it is believed that diversity is a big reason for it.
2.6 Challenges of Diversity
There are several challenges for a multinational organisation when facing culturally diverse workplaces. An obvious and major challenge is miscommunication, such as the language barrier. If an employer speaks to an employee who speaks another language it is harder to make the point across even if there are translators. Cultural bias is an additional part which challenges diverse work environments. Cultural bias both includes discrimination and prejudice. Another challenge is assimilation. Assimilation does not just form a situation in which people who are different are likely to fail; it also decreases the productivity of the organisation which can affect the overall profits.
As said by Cole (2003) the main objective of diversity management is to have productivity and profitability boom within the multinational organisation. It is crucial to consider the recent style of leadership is established by humanistic concerns, rather than those legal and dogmatic. This established move towards outdated EEOC actions will assist to make sure productivity and profit all around. In relation to this, it has been said that every minute of each single working day someone files a discrimination suit. Local, county and national laws prohibit discrimination based upon issues such as age, race, sex and religion. In the result of an organisation founded guilty, it must pay for the attorney fees, court costs, damages and many more. Claimants win millions of dollars/pounds/Euros annually as a result of discrimination charges. The area of financial burden will be decreased substantially when an organisation has created an environment of diversity management established. Ignoring diversity within a multinational organisation does have its consequences. The inability to manage diversity within the workplace can be tremendously harmful and costly.
2.7 Legal Frameworks
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It is important for a multinational organisation to be diverse in the rapidly changing global market because there are laws and legislations that they have to follow. The two vital things that the organisations have to know is firstly that the law protects employees against discrimination, both direct and indirect on several grounds including; race, sex, sexual orientation, religion, age and disability. Secondly, the employers also need to comply with legislation relating to: equal pay, positive action, recruitment and promotion, dismissal, harassment and victimisation. In addition to this, employers may be liable to pay damages if a court or employment tribunal finds them guilty of discrimination. There are no upper limits for compensation in discrimination cases.
2.8 Managing Diversity Tools
Managing diversity within a global market goes far beyond the limits of equal employment opportunity and affirmative action. In other words, managers should be willing to work towards changing the organisation in order to create a culture of diversity and inclusion. However, the leadership's support of the diverse change cannot be understated. High performing diversity managers recognize that specialized skills are necessary in order of having a productive, diverse workforce. Assessment skills and diversity education are vital elements of culture change. Appendix 2 shows a measurement framework for diversity. This model illustrates that there are more benefits than costs when implementing diversity within a multinational organisation. In addition to this, Appendix 3 shows that Daft (2009) created a model called 'traditional vs. inclusive' that illustrates that the traditional diversity does not consider as much as the inclusive diversity. This shows that the global market is changing dramatically and there are more and more issues to consider for diversity within a multinational organisation. In addition to this, the 'Leadership and the Culture of Trust' (1994) journal explains that leadership in this cultural environment is difficult at best, impossible at worst. However, it stretches our collective imagination to suggest that one person by dint of individual personality or capacity, bring together a group of diverse individuals and groups to produce anything. Appendix 4 shows the discrimination model adapted from Ishmael (2000) which shows step-by-step of discrimination.
To conclude, diversity is highly important for a multinational organisation, in a rapidly changing global market for several reasons. These things are such as strengthened cultural values within the organisation, enhanced corporate reputation, help to attract and retain highly talented people and improve motivation and efficiency of existing staff. It also, results to a lower rate of absenteeism and improve global management capacity. On the other hand, there are downfalls such as high costs in terms of training management and so forth. However, these down falls do not balance with the importance of diversity to a multinational organisation because this is a key reason why companies such as coca cola, IBM etc are the top companies on the global market.
Multinational organisations are broken down by countries and the multinational organisations can operate in numerous ways. A company cannot innovate globally if its managers identify primarily with local narrow-minded interests. In other words, by being diverse in a global market, a multinational organisation can extend their business if the organisation builds a diverse environment. Human resource department shouldn't be bias in relation to age, gender, race, ethnicity, physical abilities or qualities and nationality. It is important that the multinational organisation only makes judgement on educational background, work experience and expertise.
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