Cross Cultural Management

Cross Cultural Management

Introduction

Diversity in age, gender, race, sexual orientation, physical or mental ability, religious beliefs, education level, social class, and geographical area of origin should be incorporated in all sectors of a company to ensure successful competitiveness in global economy. Over the years, diversity has become an issue that has completely changed how people, businesses, institutions and governments are run world-wide. Governments have enacted laws stipulating inclusion a certain ratio of minorities in organization positions. This is in regard to education sector, employment sector, and leadership roles. These federal and constitutional requirements are an attempt to rectify decades of discrimination for the minorities. Moreover, globalization, changing demographics, generational gaps, and increased number of dual income families and single working mothers have taken a great role at pushing for cross-cultural incorporation in various economical, social, and political sectors (Fields, Goodman & Blum, 2005). Companies and organization have now realized that acceptance and incorporation of diversity is the key to successful global competitiveness.

My opinion

Basically, there are two major reasons as to why companies have and are adapting cultural diversity in their personnel. The first is due to federal, state or constitutional acts enacted stipulating this requirement by each company. Due to years of discrimination and oppression on the minorities, governments globally have enacted laws that require a certain percentage of the minorities in employment positions in companies as an attempt to give equal opportunities to all. This requirement is what has paved way for the second reason of cultural diversity in companies which is globalization related. Companies that have for a long time incorporated cultural diversity in all departments have customer related, employee related and profit related advantages over others (Jayne & Dipboye, 2004). This is the major and main reason as to why companies today are incorporating cultural diversity. It is the current and future way in which companies will remain competitive in the global economy.

Globalization

Globalization through internet connectivity and social networks has made the world a smaller place. Companies have therefore expanded their businesses and branches in different parts of the world. Internet connectivity has also fostered online shopping for all customers despite physical location. This has therefore diversified customers for companies which in turn have pushed for a diversified workforce that understands the different needs of customers. Companies therefore seek to understand their customers’ languages, cultural practices and beliefs. Understanding languages enables elimination of language barrier during employee-customer interaction therefore making customers feel needed, appreciated and personally relate with a company (Gelfand, Erez & Aycan, 2007). Studying cultural practices and beliefs of customers enables businesses structure their products and services in a way that is in line with customer beliefs. This in turn creates the image of a company that understands its customers and cares about them. This is vital is attracting and retaining new customers for any company globally. To understand needs of diversified consumers then companies have to employ diversified workforce. Employees are the key to creating and maintaining this unique brand and image of a company to its customers. Therefore, companies end up incorporating cultural diversity in its departments to deal with the diversified needs and wants of diversified global customers (Fields, Goodman & Blum, 2005).

Employee-based reasons

With increased globalization, education, and awareness there is a need to have a diversified workforce due to advantages that result from that. There are more people highly skilled in various fields despite their age, gender, race or sexual orientation. Companies are therefore contracting and employing workers due to their skill to ensure that productivity is maximized. Companies are also incorporating diversity to ensure recruitment and retention of talented employees (Ely & Thomas, 2001). Companies understand that diversity does not make employees any less talented and are therefore diversifying their employee base to ensure that they retain talent for purposes of creativity and innovativeness. Diversification also retains workers since all cultures are accepted by a company hence workers feel comfortable, appreciated and accepted at the work place which motivates them to work even harder and smarter in their areas of expertise (Gibson & Gibbs, 2006).

Diversification also enables creativity and innovation through employees addressing various needs of their diverse cultures and giving ideas as to how to go about business. Different employees know what consumers of the same category as them expect from a company therefore they create products and services that are acceptable to their group which hence increases a company’s sales and profit margins since it gains more customers. Diversification leads to increased employee engagement since employees are motivated to deliver quality products and services. Employee engagement is through teamwork whereby employees work at understanding and learning each other’s cultures which leads to profitability due to trust and good interpersonal skills fostered.

Marketing

Marketing is about popularizing products and services of a company to the targeted consumers for increased sales. Diverse workforce is a marketing strategy that companies are adopting to ensure that their brands earn the trust of potential and current consumers. Having different workers builds confidence of customers in a company since they can relate and identify with workers with their cultural practices (Gibson & Gibbs, 2006). It also adds to the uniqueness of a company’s brand because it identifies itself with all kinds of people which is not common by many companies. It strengthens the brand of a company against other brands offering same service. This unique branding earns a company new customers and customer loyalty in a market setting where competition is severe.

Inclusive environment

Companies are focusing at unifying differences between cultures through ensuring an all inclusive working environment. This ensures there is corporate and departmental unity and peace between workers despite their differences. Unity and teamwork is important in achieving company’s goals, mission and objectives. Need for an inclusive environment leads to management focusing on talent acquisition and leadership development (Gelfand, Erez & Aycan, 2007). Therefore, they focus on building strong and diverse leaders who are open to all business ideas that address needs of different groups. This kind of expertise is necessary for a company to take over sales in its particular market structure. Diversity is focused on differences while inclusion focuses on unifying those differences. Inclusion therefore modifies the image of a company to be that which acts and thinks like the culture it operates in and serves. Finally, this leads to higher productivity, improved return on investment, and better client relations.

Operation

Diversity incorporation cuts back on quite a number of costs that would otherwise largely affect a company’s financial position. Constitutional and federal laws require that employer’s do not discriminate against their employees based on their cultural diversity. Therefore embracing diversity avoids legal costs that would be incurred if management discriminated against potential employees. It also reduces costs on absenteeism, substandard services by employees, and bad image. Saving on these financial and social costs leads to continual global growth of a company.

Company growth

Diversity leads to increased creativity, innovation and productivity by workers which lead to business growth and expansion. Companies that respect customer’s opinions and value systems work around and with them to ensure their products and services observe diversity of culture. This enables companies grow due to increased sales, competent and motivated employees, unique branding, diverse leadership skills, and good company image. Growth is also fostered by better health and safety working conditions for employees (Fields, Goodman & Blum, 2005). Diversity incorporation aims at creating healthy environment where discrimination and unfair management is eliminated. Diversity ensures that limitations like absenteeism and quitting by employees is reduced since workers have high morale to work. This therefore leads to effective and efficient time and resource management hence leading to improved business growth.

My stand

I think business culture and observing cultural differences has more impact on how people work internationally as compared to business convention. Business culture is all about the mission, vision and values of a business that determines what it focuses on and how it goes about its activities to achieve its goals. Professional codes of conduct have lesser impact on doing business internationally as compared to diversity due to several reasons. Codes of conduct had great impact on the success of a business before there was rampant globalization since companies were mostly based in their countries of origin and diversity was very minimal. Then, companies only observed few cultural differences which they were familiar with since they mostly involved their own cultures. Creativity and innovation was limited to few and common cultural differences which therefore meant success of the business would be determined mostly by professional codes of conduct (Ely & Thomas, 2001).

However, I believe that current and future success of a company depends on how it embraces cultural diversity. Globalization has made e-commerce possible therefore there is minimal direct customer relation and, therefore, codes of conduct have minimal impact on the successful sale of a commodity. Companies therefore have to understand customers’ needs and wants through understanding their diverse cultures and processing or manufacturing commodities according to these cultures. In spite of persistent direct customer interaction, cultural diversity is still the key determinant in business. Diverse workforce in a company easily attracts and retains customers by earning their trust. It is the first aspect of an organization that a customer notices and decides whether to inquire on products and services it offers (Bilimoria, 2006: 50).

Therefore, for a company to attract attention from potential customers it has to have diversified workforce such that there is someone that each customer can relate to on a personal level. Code of conduct has an impact but minimal if any power in attracting customers to a business. It is mostly essential when a business already has customers and it is working at retaining them through meeting deadlines, quality goods and services, and respect for contract terms. Customers also love feeling secure and at home even when conducting business activities. Customers therefore have stereotypes that people of the same cultural practices and beliefs like them are better at transacting business with because they are understanding and easily trustworthy. Therefore global businesses can only remain competitive by acting on this stereotype through diversifying their workforce to ensure they acquire trust of customers world-wide.

Google has succeeded through diversifying which has been its competitive advantage over other companies. It diversified through launching its 40-language initiative which made sure that the internet population has access to 40 languages therefore making it easy for users to choose whichever language they are comfortable with. Its value for diversity is displayed in its diversity motto “Never judge a search engine by its interface,” which humanly means do not judge people by their appearance (Browaeys & Price, 2005). Value of diversity by Google has led to its use by millions of people worldwide because it has shown it dedication to an inclusive environment through celebrations like Black History Month, Hispanic Heritage Month, Veteran’s Day and LGBT Pride among others. This simple act of cultural diversification in all its departments has led to it success as the leading search engine organization globally.

Conclusion

Cultural diversity is an emerging issue that is shaping and changing how businesses are being managed globally. It has changed business management to be solely customer-oriented in that companies have to satisfy the needs and wants of customers to remain relevant in markets. This is good for customers since products and services are of high quality and customers have all the power in market settings. Companies therefore have to embrace cultural diversity in all departments to ensure creativity, innovation, teamwork, productivity, and competitiveness. Emerging global trends have pushed for a diversified workforce for the growth and development of the economy and sustenance of competitiveness by companies globally.

References

Bilimoria, D 2006, ‘The relationship between women corporate directors and women corporate officers,’ Journal of Managerial Issues, vol. 18 iss.1, pp. 47−61.

Browaeys, MJ & Price, R 2005, Understanding Cross-Cultural Management (2^nd Ed.). Prentice Hall: Financial Times

Ely, R & Thomas, D 2001, ‘Cultural diversity at work: the effects of diversity perspectives on work group processes and outcomes,’ Administrative Science Quarterly, vol. 46, pp. 229−273.

Fields, DL, Goodman, JS & Blum, TC 2005, ‘Human resource dependence and organizational demography: a study of minority employment in private sector companies,’ Journal of Management, vol. 31, pp. 167−185.

Gelfand, MJ, Erez, M & Aycan, Z 2007, ‘Cross-cultural organizational behavior,’ Annual Review of Psychology, vol. 58 iss. 1, pp. 479−514.

Gibson, CB & Gibbs, JL 2006, ‘Unpacking the concept of virtuality: the effects of geographic dispersion, electronic dependence, dynamic structure, and national diversity on team innovation,’ Administrative Science Quarterly, vol. 51 iss. 3, pp. 451−495.

Jayne, MEA & Dipboye, RL 2004, ‘Leveraging diversity to improve business performance: Research findings and recommendations for organizations,’ Human Resource Management, vol. 43, pp. 409-424.