In the current global scenario when the driving forces of globalization like communication, transportation, advent of technologies, transnational companies and internet have diminished boundaries, the work place environment has become extremely diverse and multiculturalism has become a norm in global organizations. Though multiculturalism brings in some challenges but if those challenges can be overcome with proper implementation of strategies then diversity adds more value to an organization in terms of competitive advantage. A multicultural organization is an organization that consists of not only a diverse workforce, but in which all the minority sections are well integrated into different levels of the company including the positions in top management. A multicultural organization doesn't have any room for prejudice and discrimination and identifies talent and skills as the primary scales for success. This paper will highlight the characteristics comprising a multicultural organization and its competitive advantage in the market.
Characteristics of a Multicultural Organization
Pluralism refers to the mixed memberships of the organization and how the organization is implementing all-inclusive measures to involve all the people belonging to both majority and minority groups in different aspects of the organizational objectives. There are several techniques that could be employed to create an atmosphere of pluralism in the organization. First of all, employees should be given training on awareness and skill building. Awareness training makes the employees aware of the meaning of diversity and how diversity should be managed in the workplace. The skill building training offers more specific input on how cultural norms of different groups may affect work behavior (Cox, 1991). There are many companies like Hewlett Packard, McDonnell Douglas, and Ortho Pharmaceuticals which have put these training programs to use. In a San Diego manufacturing unit, Hewlett Packard gave training on cultural differences existing among Mexican, American-Anglos, Filipinos ad Indochinese.
- Full Structural Integration
Full Structural Integration refers to the situation when the minority group members "are well represented at all levels, in all functions, and in all work groups" (Cox, 1991). The fulfillment of this goal requires even distribution of education levels and skills throughout the organization. Some companies which have undertaken education programs to address this situation are the Aetna Life Insurance Company, Chase Manhattan Bank, PrimAmerica, Eastman Kodak, and Quaker Oats. Affirmative Action is another technique to create full structural integration. PepsiCo has initiated a program called 'Black Managers Association' in order to hire educated minorities directly into managerial position or select suitable minority people from the existing group of employees for the promotion to managerial roles.
- Full Integration in Informal Networks
In order to promote full integration in informal networks, a multicultural organization organizes different mentoring programs, support groups and social events for the minority members so that the minority groups can utilize the opportunity to give an expression to their cultural identity and share their cultural norms with members of the dominant groups. This also helps the dominant groups get the drift of the cultural traditions and heritage of the minorities.
- Absence of Prejudice
Absence of prejudice is instrumental in creating a multicultural organization as prejudice begets discriminating behavior. The bias free environment devoid of discrimination can be created by making use of equal opportunity seminars, training on civil rights legislation, bias reduction training, sexual harassment workshops, focus groups, research and task forces. Digital Equipment is one of the many organizations that have implemented in-house focus groups with the intent of scrutinizing the differences of attitude, feelings and beliefs existing among different culture groups and their influence on work behavior. These focus groups discuss about the group differences openly and as more people take part in the discussion, lot of problems get sorted out on their own through communication. Further bias-reduction training is offered in many organizations to change attitudes. For example, Northern Telecom has implemented a 16 hours program which helps employees identify and rectify their own negative attitudes towards people of different cultural groups(Cox, 1991). Further internal research should be conducted in order to ensure that minority groups are fairly treated. For instance, Time Inc. holds a yearly assessment program for men and women working at the same level to compare pay packages and equal treatment. Formation of task forces entrusted with the responsibility of monitoring the policies and practices of the organizations would also help diminish discriminating behaviors.
- Equal identification with Organizational goals
Organizational Identification is another attribute to multicultural organization. Members of different culture groups partake in the discussion of determining the organizational goals and deciding on factors to fulfill those goals. When all the employees regardless of their culture are allowed to take part in the decision making, they form a sense of attachment with the organization. When the companies manifest a genuine concern for the upliftment of the minority groups and indulge in fair treatment of all the groups irrespective of racial and religious differences, the employees develop an emotional attachment with the companies and identify themselves with the company's interest.
- Minimal Inter-group Conflicts
Some conflicts are bound to exist in a diverse setting due to differences in culture, language, ethnicity and religion but in order to prevent the conflicts from taking a serious shape, conflicts should be managed through survey feedback and conflict reduction training. Survey feedback is the most effective tool to reduce conflicts. For example, Proctor and Gamble found out through a survey feedback that the average time a white new joiner takes to assimilate into the organization is quite less compared to black females who take the longest time for integration. So the company developed an 'on-boarding program' to address the problem. Conflict Resolution Training is another technique used to reduce intergroup conflicts. AT&T is one of the many organizations having identified stress and conflict reduction as the focal point of its training programs (Cox, 1991).
Competitive Advantage of Multicultural Organizations
Some of the identifiable factors affecting globalization include export markets, international markets, international competitiveness, international growth and trade blocs. International market spots new markets and builds export markets. Trade Bloc helps gain an access to new markets and influence long term trading cost in different regions of the world. International growth of an organization doesn't involve only expanding its size, it involves making a global presence which is possible only if companies make mergers and takeovers and turn their business into a transnational business. In the context of such global factors influencing global business market, multicultural organizations have a lot of competitive advantages over monolithic organizations in terms of international competitiveness. The performance of global organizations depends on "their ability to cope with heterogeneous cultural, institutional, and competitive environments, to coordinate geographically dispersed resources and to leverage innovations across national borders" (Carpenter, Sanders & Gregersen, 2000, p 3). Multiculturalism brings diversity in the work place and a diverse workforce consisted of employees of different backgrounds and experiences generate a group of more creative, productive and innovative employees. Diversity boosts up the economic growth of a company. Human capital grows as more women, racioethnic minorities, gay and transgender people join a workforce. A study conducted by McKinsey & Company shows that an increase of women in the workforce in the USA from 37% to 47% within the past four decades has contributed to a quarter of growth in current GDP of the nation (Kerby & Burns, 2012).
Globalization paves the way for a diverse international market and export with customers and clients coming from all cultural groups. For instance, the high minority workforce over 50% has boosted the customer growth in Union Bank of California. Increased cultural sensitivity and insight due to diverse workforce adds to the improvement in developing and marketing products and services for different segments of people. Huey Wilson, the vice president of HR in Mattel, with his statement "Our Employee Resource Groups (ERGs) are very important to us.They help us define products that work for their regions or demographics,” reinforces the point how a different perspective from another culture group adds to the development of products and services in a company (Forbes Insight, p 5).
Multiculturalism also helps attract a group of highly qualified candidates. Since diversity broadens the selection range, companies can hire the cream of the crop from the labor market. The economic situation in the world having become extremely competitive, a multicultural organization gets the advantage of choosing candidates from a diverse range of talent pools which is essential for success in the current market condition.
Several survey results have confirmed that a diverse workforce by bringing in different insights adds to the innovation strategy of a company and it helps trade deals, corporate mergers, and international growth of an organization. 56% companies with over $10 billion in annual revenues concurred that diversity brings in innovation. Rosalind Hudnell, a board of director member of Intel opines that the diverse workforce has boosted the productivity in her company, "We have a vast amount of diversity that comes into work every day to build technology that plays out around the world.You can’t be successful on a global stage without it” (Forbes Insight, p 5).
A diverse workforce also helps companies retain the best talents in the job thereby reducing the employee turnover cost. Companies that don’t promote diversity foster a hostile work environment which results in high attrition rate and therefore they lose a hefty amount of money every year on employee turnover whereas companies which foster a healthy work environment with people from different ethnicities working together have higher employee retention rate.
Diversity also helps in solving problems and making decisions. People from different backgrounds have different problem solving aptitudes and also the opinions on a particular issue vary among diverse group which helps in solving a similar problem in different ways. The CEO of Bell Atlantic Ivan Seidenberg opines that diversity opens door for diversity of thinking and helps make better decisions, "If everybody in the room is the same, you'll have a lot fewer arguments and a lot worse answers" Geoffrey Colvin, 1999).
With the world economy having become interdependent on global factors such as international growth, export markets, international markets and trade blocs, multiculturalism has become a norm in the global market and in such scenario it is essential to foster the growth of multiculturalism by tending to the characteristics of multicultural environment such as pluralism, full integration programs, integration in informal networks, elimination of prejudice and minimization of intergroup conflicts. If properly taken care of, multiculturalism offers a host of benefits to the company in terms of increasing economic growth, opening diverse market, attracting qualified talents, bringing in innovation and solving problems. Though multiculturalism poses certain challenges to a company but at the end it offers more benefit and value to an organization than anything else.
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