Acme_and_Omega

The Impact of Multicultural Workforce on Organization Success Aicha Kone University of Maryland University College AMBA6009248 Trude J. Fawson May 2010 The concept of multicultural workforce as a reflection of cultural diversity within an organization has evolved over the years. While earlier discussions on organizational diversity may have been limited to issues of gender and racial differences, today it has grown to include range of factors that influence how individual interactions within an organization propel companies to success. Specifically, leaders of the cooperate world has began to realize the direct impact of diverse workforce on the bottom line as well as appreciate the potential values of the viewpoints that are shaped by different market experiences and the inherent risk of a culturally homogenous workforce. While multicultural workforce ensures several performance advantages over homogeneous workforce, its benefits come with some organizational costs. Some of the unquestionable real-world advantages of a multicultural workforce are high level of creativity and innovation, competitive advantage, adaptation to changes and more organizational flexibility, and better problem-solving abilities. On the other hand, some of the disadvantages of multicultural workforce are intergroup conflict, communication breakdowns, and negative group dynamics. The purpose of this paper is to highlight both the negative and positive impacts of multicultural workforce as it relates to the effectiveness or success of any organization. As it has been realized by several successful organizations with diverse workforce and demonstrated in numerous studies, diversity creates competitive advantages. Organizations with multicultural workforce gain competitive advantage in the marketplace by drawing on wide-range of investment talents, market experiences and different perspectives. However, in order to attain this competitive advantage by way of improving performance and result, organizations must recruit, and retain a diverse and inclusive workforce by tapping into a rich labor pool of the exceptional capabilities of women and minorities. By attracting, retaining and promoting maximum utilization of people from diverse cultural backgrounds, organizations with multicultural workforce are able to gain competitive advantage over those organizations without diverse workforce as well as sustain the highest quality of human resources. To achieve this, organizations must be willing to embrace diversity and inclusion from the top down; which means top leaders of the organizations must demonstrate a high level of commitment. This will not only help to ensure the authenticity but also the success of the various diversity related initiatives and programs. Also, being able to show the relevance of a positive impact of a diverse market and consumer to the organization’s bottom line will further promote the creation of culturally rich workforce. On the other hand, while companies focus on recruiting a diverse talent pool, they must not forget to pay attention to retention. Again, this unique potential of workforce diversity can be unleashed if organizations encourage an environment that does not only embrace multiculturalism but also celebrate it. By creating year round activities that recognize and celebrate the various cultures within the organization will help promote better understanding of the cultural differences among the employees of varied cultural backgrounds. However, for a multicultural group to enjoy competitive advantage as a product of diversity, the people must first be thought how to appreciate one another’s differences and how to challenge them in pursuit of the best possible outcome. Second, although faced with problems arising from different work and communication routines, multicultural organizations execute higher level of networking, creativity and innovation (Bouncken & Ernt, 2009). This is possible partly because they possess greater degree of openness to new ideas, utilizes broader source of information and tend to be better at organizing these information. This quality is especially evident in research-oriented and technology organizations. Similarly, organizations with diverse workforce have better understanding and are able to penetrate wider and enhanced markets. These organizations are able to do so because not only that they are able to embrace a diverse workforce internally, they are better suited to serve a diverse external clientele. Moreover, diverse organizations have an increased understanding of the social, political, legal, economic, and cultural environment of foreign countries. In the same line, culturally diverse organizations enjoy enhanced network of external contacts. Therefore, due to broad network of external contacts, diverse organizations are better able to access valuable expertise and exercise greater influence in a multicultural global market. Third, culturally diverse work environment contributes to higher quality decisions and improves problem solving abilities (Ely 2004). Subsequently, organizations with ability to make quality decisions tend to generate creative ideas which often result to increase productivity among the employees in a multicultural environment. Moreover, people with diverse perspective as seen in a multicultural workforce are able to generate a more comprehensive view of a given task especially during the earliest phase of problem solving. For example, a company with gender and ethnic diversity within a sales team may increase the team’s ability to understand perspectives of a broad variety of clients while a company with tenure diversity may be able to ensure that the company understands both the internal environment and the competition as viewed through the eyes of long-tenured members and short-tenured members respectively. With the increasing influence of diverse culture in the global market, organizations with superior quality decisions and problem solving abilities will thrive. Despite the enormous positive impact of a multicultural workforce to the effectiveness of an organization, diversity is not without its drawbacks. Multicultural workforce can suffer a serious negative organizational dynamics such as ethnocentrism, stereotyping and cultural clashes. Too much diversity in the context of problem solving can be dysfunctional. Diversity can lead to increase ambiguity, complexity, and confusion. Organizations with diverse workforce may have difficulty agreeing on any meaningful decisions or single course of action. In combination with imbalance power structure, these negative dynamics can create work disadvantage as well as significant drain on the energy of the people, especially women and minorities who are more likely to feel oppressed by the difference. In a traditionally assimilationist-oriented organization the cultural difference between minority and majority workers create a barrier to full participation of the minority workers. So also, any mismanagement of diversity either by way of ignoring it or mishandling it may lead to poorer work outcome which includes affective and achievement outcomes. These in turn can have an adverse effect on first level organizational measures such as productivity, absenteeism and turnover. Negative dynamics within an organization can have severe negative impact on the productivity of a culturally diverse organization. As stated above, one of the practical advantages of diversity is that a group of people with varied skills, background and viewpoints tends to come up with better decisions and such often end up with creative solution; subsequently ensuring a competitive advantage. However, this competitive advantage can quickly turn into a competitive disadvantage or remains untapped if there is a serious communication breakdown within the group. In such situation, homogenous workforce often out-perform culturally diverse workforce. Organizations with heterogeneous workforce are often out-performed by organizations with homogeneous workforce because individual members are not allowed to make special contribution to the work effort. For example a 17-week study of the performance of both multicultural groups and mono-cultural groups initially revealed a higher score in both process and performance effectiveness among the mono-cultural group. However, the differences between both groups converge as intergroup communications improved. By week 17, no difference in overall performance was appreciated and the multicultural group had a better score on two task measures (Watson, Kumar & Michaelsen, 1993). The above finding further stresses the importance of intergroup communication to the success of any organization with culturally diverse workforce. In Comparison to culturally homogeneous workgroups, intergroup conflict can potentially be higher in multicultural workgroups. Several cross-sectional studies have demonstrated that certain pattern of intergroup conflicts such as relationship conflict which is inherent in multicultural workforce is detrimental to individual and group performance as well as group members’ satisfaction. This negative impact of conflict often leads to team members’ distraction from the assigned task, causing them to work less efficiently and produce suboptimal products. Conversely, other patterns of conflict can increase creativity and performance of a diverse group if properly managed and controlled. These potential values of constructive conflicts have been recognized in several research studies. Specifically, higher group performance has been linked moderate level of task conflict (Jehn & Mannix, 2001). For example, when working on complex, non-routine problems, culturally diverse group (consisting of individuals with diverse types of skills, knowledge, abilities, and perspectives) tend to be faced with greater degree of task conflict. This higher degree of task conflict increases the group overall productivity because the group tend to benefit from the differences of opinion about the assigned task Similarly since the final decision that eventually emerges from conflict is generally superior to that of the individual perspectives, task conflict often contributes to a more complete analyses of the issues, improved decision quality, and performance. However, the potential benefits of a constructive conflict such as task conflict is fully realized if conflicts are controlled by reconciling competing goals, distributing power in a representative manner, affirming the identity of minority group members, and acting when resources are in abundance and cultural differences are lower or well understood. Over the decades, the power and potentials of multicultural workforce to the success of an organization as it pertains to better decision making, higher creativity and innovation, greater success in marketing to foreign and ethnic minority communities, and a better distribution of economic opportunity have been well demonstrated in literature. Conversely, the potential drawbacks as it relate to intergroup conflict, communication breakdowns, and negative dynamics such as ethnocentrism, stereotyping and cultural clashes are also well documented. Overall, the potential benefits of multicultural workforce outweigh its disadvantages if diversity is well managed and environment in which all members of all social-cultural backgrounds contribute and achieve their full potential is created. References: Bouncken, R. B., Ernst-Morit-Arndt (2009). Cultural Diversity in Innovation Teams: Surface and Deep Level Effects, International Journal of Business Research, 9 (4), 17-26. Choi, S., Rainey, H.,(2010). Managing Diversity in U.S. Federal Agencies: Effects of Diversity and Diversity Management on Employee Perceptions of Organizational Performance, Public Administration Review, 109-121. Hudson, T. J., (2010). The Diversity Opportunities of Today –It’s Generational, Profile in Diversity Journal, 46 Jehn, A. K, Mannix, E. A, “The Dynamic of Nature of Conflict: A Longitudinal Study of Intragroup Conflict and Group Performance”, Academy of Management Journal, 44 (2), 2001, 238-51. Mullins, B., “The Bottom Line”(2009). Profile in Diversity Journal, 24 Waston, W.E., Kumar, K. & Michaelsen, L.K. (1993). Cultural Diversity’s Impact on Interaction Process and Performance: Comparing Homogenous and Diverse TASK Groups. Academy of Management Journal, 36 (3), 590-602 White, R. D., (1999). Managing the Diverse Organization: The Imperative of a New Multicultural Paradigm, Public Administration & Management: An Interactive Journal, 4(4), 469-93 Yosufzai, S.,(2009). The Evolution of Diversity, Profile in Diversity Journal, 32.