The Challenge of Cross-Cultural Diversity in Multinationals (Essay Sample)

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The Challenge of Cross-Cultural Diversity in Multinationals
Introduction
Globalization in the business and trade sector has led to advancements in information technology, liberalization in trade, and better management practices. Resultantly, more companies are continually expanding into foreign markets because these globalization aspects enable them to enter and operate in different countries easily. Alternatively, the crossing of international boundaries by businesses has led to the establishment of multicultural organizations, where employees from diverse cultural backgrounds interact as workmates. These organizational expansions have been beneficial since the results have been reduced production costs, the exploitation of market opportunities, and economic integration. However, they have also led to the realization that the operation and management of global corporations is a lot tougher compared to the management of a local company. While cross-cultural diversity facilitates the innovative thinking needed to enhance business competitiveness in an organization, the diversity can hinder the realization of important business goals in several ways if the managers fail to be culturally sensitive and to embrace flexible leadership practices that promote creativity and motivation among their employees.
Effective cross-cultural management practices determine the success or failure of international business corporations (McFarlin and Sweeney 68). Culture can be described as shared and pervasive beliefs, values, norms, and symbols that inform the lives, practices, and views of different groups of people across the globe (Bono and Van der 127). Therefore, managers of multinational must condition themselves and adjust their leadership strategies to align with the diverse cultures of the people in the countries they operate. Ostensibly, the traditional approaches used to accommodate cultural differences within the workforce of local organizations have proved ineffective and inadequate for the management of multinational corporations (Bono and Van der 129). Hence, since the approaches cannot satisfactorily solve the challenges of cross-cultural diversity in the current era of globalization, new studies in the area must focus on the novel approaches that the management can use to govern their culturally diverse workforce.
Cross-Cultural Diversity in Multinationals
Cross-cultural diversity arises within a workplace setting when there are differences in ethnicity, race, nationality, language, sexual orientation, and even religious inclinations. Notably, this aspect is usually the case for international companies that employ people from different countries (Erbe 185). The diversity is intensified because the diversity based on ethnicity, religion, sexual orientation, and race is present in all nations the world over (Erbe 186). Moreover, since multinationals are large corporations that require a substantial workforce, cross-cultural diversity inevitable.
Before one can conduct further research on the management approaches that can suppress the negative impact of cross-cultural diversity, a review of the causes and emergence of the diversity is necessary. The first is a changing population demographics since senior workers, women, physically challenged individuals, highly-educated persons, and even the minorities are have continued to join the global workforce in masses (O'Sullivan 104). Another cause is the increasing pace at which initial local companies are going global. The diversity is advantageous to multinational corporations because it helps them handle the existing competitive pressure as well as recognize and take advantage of the diversity when making major decisions.
Review of the Benefits of Cultural Diversity
The management of business organizations can reap numerous benefits from cross-cultural diversity in the workplace. With an organizational culture that appreciates diversity, the management is always open to hire workers from a wide array of cultural backgrounds, which ensures that the company takes advantage of a wide scope of talents and views that come with differences in ethnicity, religion, race, and gender among the employees (McFarlin and Sweeney 233). Besides, several other minor although common distinguishing characteristics contribute to an organizational culture where the staff cooperates at the workplace regardless of any persisting differences that may arise from their cultural differences (McFarlin and Sweeney 234).
An important benefit of having a diverse workforce is improved morale, but this depends on whether the management has implemented any mechanisms for promoting coexistence among its employees. When the diversity is managed effectively, the staff can learn to be culturally sensitive and conscious. The ideal outcome in a work environment where all stakeholders are valued and regarded as equally important is an improvement in the workers’ morale and collective positivity towards assigned tasks (Bono and Van der 169). Everyone in such a working environment feels appreciated and willing to share personal ideas towards the betterment of the workplace and the achievement of the organization’s goals. As such, diversity in the workplace is advantageous because it leads to deeper ideas and broader perspectives. This aspect is in the view that a community of employees with diverse backgrounds will share varying perspectives when faced with a workplace challenge. According to Bono and Van der (170), increased ideas are an important ingredient of better decision-making.
For a company that seeks to gain mileage and a competitive advantage at the international sphere, it is crucial for it to develop the business in the targeted foreign markets by having a workforce that demonstrates an appreciation of cultural diversity. Often, this approach helps ensure that multinationals corporations communicate and interact with the global markets, form and establish strong ties with suppliers and partners, and give a hint about the cultural implications of the business in different parts of the world (Erbe 217). Nevertheless, embracing diversity ensures that international corporations hire indiscriminately, which helps establish good relationships with the immediate and international communities. With the current increased movement of people to different parts of the world and as communities become increasingly diverse, it is necessary that global business organizations also become diverse. Functionally, all businesses require a workforce that understands and communicates with the immediate community members and customers. Hence, businesses that operate in culturally diverse communities make the management of a culturally diverse workforce a crucial strategic element (Erbe 220). A review of the benefits of cultural diversity to a multinational organization reveals the need for its managers to adopt the best practices when governing the employees.
Managing Cross-Cultural Diversity
Once a company has expanded its operations beyond one country, it becomes a multinational and multicultural organization. Then, the challenge of cross-culture ensues, and the leadership must be cautious to manage the challenge effectively so that it benefits the organization. The challenge arises because the company is forced by circumstances to hire works from different cultural backgrounds who are to work together in creating a multiculturalism work environment (O'Sullivan 324). Employees that work in new nations need to adjust their communication patterns, leadership styles, and several other practices such that they blend with the host nation’s systems. Such workers become expatriates because they belong to a different country from the one in which they work. For multinational corporations to enjoy greater productivity, they need to fuse their employees’ cultures by avoiding the barriers discussed below (McFarlin and Sweeney 221).
Parochialism
For multinationals, their international operations are conducted in an environment that is different from the social system in which the corporation was based at first. The new social system has a direct and indirect influence on the organization’s staff since they may experience different behaviors from what they have been accustomed to at home. In other instances, they may fail to recognize any major cultural differences in their new countries suc...