The current essay is based on the impact of cultural diversity on the performance, creativity, innovation of the employees in the multinational organizations.
The topic of the study- Managing in the Global context
Research question- How culturally diverse employees affecting creativity and innovation in multinational corporations?
Brief description- For the purpose of the study, the importance of cultural diversity has been assessed and a literature review has been done along with relevant references. In this regard, it has been identified that diversified cultural workforce has a contribution to the achievement of competitive advantage at the international level.
Definition- According to Ang & Van Dyne (2015), cultural diversity refers to the involvement of sub-cultures in a society or in the organization which is used for the overall working and achievement of global objectives. In this regard, the developing countries focus on the involvement of cultural diversity in the organizational environment to understand and gain the knowledge about every culture’s traditions, specific uniqueness etc.
Scope- The study is based on cultural diversity and its impact on the innovation in the global corporations. Cultural differences are the significant factor for the upcoming organizations because diversified people remain more creative in the context of the business along with further activities. Further, cultural diversity helps to generate huge business opportunities and grab the competitive advantage at the international level. Owing to this, findings extracted from the current study that culturally diversified workforce is supportive for the multinational organizations because it is based on the integration of ideas, experiences and knowledge of the employees. On the other hand, the issues of the organizations can be easily resolved with optimum collective thinking by selecting the best solutions from diversified employees. Apart from this, the results of the study can be useful for those people working in the field of research. In this context, it can be helpful for those organizations which are dealing with the issues of cultural barriers because the diversified workforce would be able to resolve the barriers of overseas culture.
Cultural diversity is important for international organizations because it helps to create awareness and understanding regarding the diversified cultural environment at the global level (Adamczyk, 2017). In this regard, it is beneficial for the global business because it minimizes the effects of cultural barriers in the organization. Cultural diversity has an important role in the successful transaction of business activities. Further, it also affects the inter-relationships with counterparties of the organizations which are consisted with varied cultural background employees. In this manner, one organization would be able to understand the cultural environment of another organization which is associated with the business.
Cultural issues are also linked with communication barriers which can be resolved through internationalization because it has an extensive support for the small firms to enter into globalization and eliminate the communication barrier (Ray, 2014). For example, if a small organization is entering into the foreign market then there will be the issue of communication with foreign parties and the employees would not be able to interact with sub-parties of business. However, it is helpful for the organization to reduce the communication barrier by involving the diversified employees in the firm for internationalization. Apart from this, cross-culture communication is affected by the several risks involved language, specific law of a country, cultural differences, time, diverse mentality of workforce etc. (Nederveen Pieterse, Van Knippenberg & Van Dierendonck, 2013). By considering this, it is necessary for the organizations to assess the cultural diversity in the organizational environment because it develops the opportunities to accept the change and deal with the cultural diversification at the international level. Further, culturally diverse employees help to develop the innovations and creativity in working by using the collective ideas and experiences.
According to few studies, there is a linkage between organizational cultural diversity and performance of the firm because the productivity depends on the innovations which come from the diversified group’s cultural environment (Stahl, Maznevski, Voigt & Jonsen, 2010; Mazur, 2010). Similarly, Anderson, Poto?nik & Zhou (2014) stated that diversity of teams leads to produce the effective outcomes for the organizations and provide wider knowledge regarding the innovation and creativity for the specific targets. On the other hand, Zhou & Hoever (2014) argued that cultural diversity develops many issues such as a lack of integration, mismanagement of complex activities, inadequate management of workforce etc. Furthermore, Ozgen, Nijkamp & Poot (2013) asserted that diversity affects social integration as well as the performance of the employees in the organization because it reduces the level of collaboration among workers. Thus, it reveals that diversified cultural employees affect the level of innovation and creativity in the organization because it enhances the chances to gather more knowledge about the social environment and apply in the company. However, it also generates problems for the management of organizations because it is difficult to manage the huge workforce in multinational corporations.
Lambert (2016) mentioned that cultural diversity is helpful to deal the challenges of dynamic environment and unexpected risk of the organization because diversified workers offer the variety of solutions to resolve the issues. Additionally, it is helpful to obtain the optimum outcomes for the multinational firm because collective intelligence has a contribution in offering more productive results. In this context, Guillaume, Dawson, Otaye?Ebede, Woods & West (2017) asserted that cultural diversity has a competitive advantage for the organizations in the form of organizational flexibility, creativity, availability of more skilled resources etc. Apart from this, Bouncken, Brem & Kraus (2016) examined that multi-cultural experience is beneficial for the multinational organizations because it develops a behavior to maintain collaboration with diversified societies and expand the opportunities to integrate the creative concepts of the varied workforce. Therefore, it shows that cultural diversity enhances the chances to build huge opportunities for the expansion of the business by involving diversified cultural people in the organization. Moreover, it also helps to minimize the external challenges which hinder the success and growth sectors of the firm.
Several studies revealed that constraint to a single cultural environment in the organization block the opportunities of expansion and innovations; however, multicultural experience has a large contribution in fostering the more creative ideas for the development of the businesses (Maddux, Adam & Galinsky, 2010; Tadmor, Satterstrom, Jang & Polzer, 2012). Besides this, Leung & Chiu (2010) mentioned that the involvement of foreign culture in the organization is supportive to grab the foreign market because employees have deep knowledge regarding overseas. Additionally, it generates the chances to enhance the level of innovation by using the knowledge of foreign culture in organization’s expansion. On the other hand, Zhou & Hoever (2014) stated that working in culturally diversified group delivers the higher quality and create a performance for the multinational organizations because it enhances the level of knowledge, perspective of businesses, free cultural environment etc.
For example, brainstorming is helpful to derive the more productive ideas, innovations and creativity in the thoughts which can be fostered through the diversified cultural workforce. Moreover, heterogeneous groups are more able to generate effective alternatives to resolve the issues in the organizations. Nonetheless, it is a difficult task for the management to engage the diversified people in a group because it maximizes the level of conflicts among employees and management (Zhang & Bartol, 2010). It indicates that cultural diversity has both the aspects such as positivity and negativity because it maximizes the huge chances to incorporate the innovation; however, it also generates the issues for the management to handle the heterogeneous groups in a single environment.
On the basis of secondary data, it has been analyzed that cultural diversity has a positive impact on the innovation and productivity because culturally diversified employees provide the valuable ideas to resolve the problems within the organization. In this regard, the views of diversified workforce take the form of integrated thinking which provides the chances to increase the productively (Ochieng & Price, 2010; Lambert, 2016). On the other hand, it has also been identified that stick to involvement of same cultural employee in the organization instead of multi-cultural workforce is not beneficial because it reduces the opportunities to deal in competitive environment. Moreover, single cultural workers not be able to perform more innovatively for the organization due to lack of awareness about other cultures. Apart from this, creativity comes from the integration of diverse cultural employees because they have a wide knowledge and experience regarding the external cultural environment of business. Further, it has been derived that any problem and issues in the firm can be easily solved with the help of the multicultural employees because the shared ideas will be screened out then the final solution will be applied to achieve the productive outcomes. Moreover, cultural diversity leads employees to work in a team and deliver the quality work which consequently affects the productivity of the workforce in a positive manner (Ukachukwu & Iheriohamma, 2013).
According to secondary analysis, it has been examined that creativity is an integral part of the organization’ s growth and expansion because it involves all the employees for innovative thinking. In this regard, cultural diversity is the main driver of the creativity which leads the innovations in the organizations (Ukachukwu & Iheriohamma, 2013). On the other hand, as per the collected data, it has been recognized that the diversified workforce develops the more chances for the organizations to take a step of expansion of business at the global level. Additionally, international level demanded the innovative thinking and creativity in business that fosters by integrated cultural environment in the organization. On the other hand, cultural diversity creates the challenges in the workplace that leads to conflicts and demotivation among the employees; ultimately the productivity of the employees goes down as well as chances of expansion also reduces for the organization due to lack of creativity (Jensen, Arnett & McKenzie, 2011; Bouncken, Brem & Kraus, 2016). Besides this, cultural distance negatively affects the global business expansion because it maximizes the overall cost for the organizations (Audretsch, Dohse & Niebuhr, 2010). Diversified people require the training to communicate with other cultural employees that incur the training cost for the firm and hinder the expansion of businesses. Thus, the overall discussion explained that involvement of diversified workforce is helpful to expand the business with creativity; however, maximizes the entire cost at international level for the organizations.
On the basis of secondary sources, it has been analyzed that diversified cultural employees generate the several issues for the management such as conflicts, demotivation, lack of knowledge of internationalization, the absence of integrated environment in the organization etc. On the other hand, it is not necessary that every employee feel comfortable to work in a team due to nature of individualism which emphasizes on the personal welfare instead of group thinking which is not acceptable in the diversified teams (Patrick & Kumar, 2012). Apart from this, cultural diversity creates the problem of time management because it is difficult for the management to bound the diversified employees in a single team. Moreover, varied cultural people remains on own standards instead of organizational values which creates the issues in the adjustment of activities.
The organizations suggested to appoint the cross-cultural teams at the workplace to deal with the cultural barriers. Cross-cultural teams have a deep knowledge regarding each other’s culture that would be supportive to provide the products as per the culture. On the other hand, it may increase new opportunities to work at an international level and contact with overseas organizations for the expansions of the current businesses. Furthermore, diversified cultural teams would be able to deal with the challenges of the organizations which occurs at the time of interaction with other countries parties such as language, knowledge, religion, communication etc. Hence, the involvement of cross-cultural teams would be helpful to attain the competitive advantage at the global level.
On the basis of issues of cultural barriers, it has been recommended that the organizations can provide the cross-communication training to the workforce to grab the overseas opportunities. However, to provide the training, the employees should at least have a little knowledge about co-cultures. But offering training by experts to the workforce would be effective to develop the knowledge of cross-communication. In this manner, it would have a contribution in reducing the communication barriers. Apart from this, in the absence of cross-cultural training, the diversified workforce would not be able to communicate with each other and deal with international companies cannot be done.
The organizations face the problem of cultural barriers which hinders the opportunities of internationalization. In this context, it has been suggested that the organizations should learn about the diversified cultures to bring the business at the peak level of success on the global economy. It would be helpful for the organizations to bring new innovations for the business. However, it is not easy to learn all about the different cultures because it requires close interactions with cross-cultural people or to hire the diversified workforce in the organization. But the gap between diversified cultures can be filled through learning about varied cultures of the economy.
For considering the importance of the cultural differences, it has been recommended that the organization should know about the client’s culture. The clients related to different locations along with diversified cultures that would be helpful for organizations to be aware of their cultures. In this manner, if the organization is operating the business at international level then a greater number of clients would be associated with the firm. Ultimately, it can increase the chances to know about all the client’s culture and reduces the issue of cultural barriers in the organizations.
Conclusion
On the basis of the essay, it has been concluded that cultural barriers affect the businesses in negative as well as positive forms. Involvement of cultural diversity maximizes the cost of training of the employees within the organization. However, cultural diversity develops the opportunities for the expansion of the business through the integration of diversified cultural workforce because it opens the new ways of innovation and creativity. On the other hand, it has been summarized that the involvement of diversified cultural employees in the organization helps to improve productivity due to diverse knowledge. It has been found that there is a positive relationship between cultural diversity and productivity. Apart from this, it has been recognized that cross-cultural knowledge is important for the organizations because it generates the chances to take a competitive advantage and maintain the cultural behavior with others. Besides this, it has also been concluded that cultural diversity increases the chance of conflicts among diversified team because they do not have adequate knowledge regarding other’s culture. At the end, it has been identified that by providing cross-cultural training, the issues related to cultural diversity can be reduced.
References
Adamczyk, M. (2017). The importance of cultural differences in international business. The Central European Review of Economics and Management, 1(2), 151-170.
Anderson, N., Poto?nik, K., & Zhou, J. (2014). Innovation and creativity in organizations: A state-of-the-science review, prospective commentary, and guiding framework. Journal of management, 40(5), 1297-1333.
Ang, S., & Van Dyne, L. (2015). Handbook of cultural intelligence. Routledge.
Audretsch, D., Dohse, D., & Niebuhr, A. (2010). Cultural diversity and entrepreneurship: a regional analysis for Germany. The Annals of Regional Science, 45(1), 55-85.
Bouncken, R., Brem, A., & Kraus, S. (2016). Multi-cultural teams as sources for creativity and innovation: The role of cultural diversity on team performance. International Journal of Innovation Management, 20(01), 1650012.
Guillaume, Y. R., Dawson, J. F., Otaye?Ebede, L., Woods, S. A., & West, M. A. (2017). Harnessing demographic differences in organizations: What moderates the effects of workplace diversity?. Journal of Organizational Behavior, 38(2), 276-303.
Jensen, L. A., Arnett, J. J., & McKenzie, J. (2011). Globalization and cultural identity. In Handbook of identity theory and research (pp. 285-301). Springer, New York, NY.
Lambert, J. (2016). Cultural diversity as a mechanism for innovation: Workplace diversity and the absorptive capacity framework. Journal of Organizational Culture, Communications and Conflict, 20(1), 68.
Leung, A. K. Y., & Chiu, C. Y. (2010). Multicultural experience, idea receptiveness, and creativity. Journal of Cross-Cultural Psychology, 41(5-6), 723-741.
Maddux, W. W., Adam, H., & Galinsky, A. D. (2010). When in Rome… Learn why the Romans do what they do: How multicultural learning experiences facilitate creativity. Personality and Social Psychology Bulletin, 36(6), 731-741.
Mazur, B. (2010). Cultural diversity in organisational theory and practice. Journal of intercultural management, 2(2), 5-15.
Nederveen Pieterse, A., Van Knippenberg, D., & Van Dierendonck, D. (2013). Cultural diversity and team performance: The role of team member goal orientation. Academy of Management Journal, 56(3), 782-804.
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