Cultural diversity is a source of competitive advantage. Discuss

Résumé du document

« To succeed internationally, we need to understand the cultures of the world; and we have all the cultures of the world represented right here - a tremendous competitive advantage. »
― Ernest Thompson, Proctor and Gamble
Nowadays, globalisation, which is a phenomenon mainly generated by the application of new technologies such as Information Systems and Internet, represents a "survival" challenge for international firms.Changes of consumption, modernity and the integration of minorities tend to suggest that an adaptation of products and services is necessary and even obliged. (C.f. Maslow Pyramid, where a need creates a need more important and more complicated to realize)This implies the application of modern principles of free trade in a global market. That is why international companies need to reach the necessary competitiveness to obtain positive results in order to elaborate contents for global satisfaction. It is undoubtedly an obligation to reach the results expected.

Extraits

[...] Indeed, Cultural Diversity in organizations can create more problems and conflicts that we can imagine. Time lost due to misunderstandings, tensions among staff, and absenteeism are disadvantages in a case of a non-adapted management or a lack of harmony even if anticipations can be made to define potential areas of conflicts. Factors such as management must be in phases with diversity to respect the ethnicity and the culture. Ethnicity is part of the identity through national or linguistic group and culture refers to the traditions and knowledge experienced by a group. [...]

[...] the extent that organizations can capitalize on the potential benefits of cultural diversity in workgroups, they will gain a competitive advantage in creativity, problem solving, and flexible adaptation to change.” (The Multicultural Organization, Academy of Management Executive, Taylor Cox, 1991) This perspective insists on the fact that organizations can utilize the individual skills of their employees and embrace their differences in order to obtain more flexibility in developing strategies. And in consequence these are more creative and diverse. However the absence of effective management of diversity, culturally diverse workgroups will have more communication problems, longer decision times, and lower member moral than culturally homogeneous workgroups.” (Cultural Diversity In Organizations, Taylor Cox p. 40). How does Cultural diversity offer a potential source of competitive advantage? Globalisation and Businesses have created a need for cultural diversity within international organizations. [...]

[...] The control for these products and these new services is a direct consequence of multiculturalism in an organisation. At first, Cultural Diversity was representing a Marketing argument. Indeed new customers groups are created by changes in demography. The customers are now more diverse than before and companies need to adapt to the cultures and subcultures created. Opportunities arise to create needs (and obviously products) to ethnic, social and other groups. Market groups are segmented and diverse, the family cell cannot stop evolution and traditional values are increasingly changing. [...]

[...] It can also be difficult to build a strong corporate culture internationally, a technical culture worldwide or a strong financial / planning system (E.g. IKEA, Elf Aquitaine, Emerson Electric were concerned). A traditional Diversity Training course is divided into four steps. Employers have to communicate clearly the objectives of the training to measure the importance made by employees. It is important to create work teams with a perspective of ethnically, racially and gender balanced. Evaluations and marks need to take an importance place in the process. And top management must be aware of its commitment in the course to be up to date. [...]

[...] Methods and theories developing by economist or sociologist concerning an organizational concept are quite complicated and it is better to analyse each situation depending on the sector, the product and the staff. To conclude, to have Cultural Diversity in an organization is a high source of competitive advantage when all characteristics are present to create a harmony between all factors. One of the most important argument concerns the management. To integrate several cultures and to incorporate different values is a hard task. The first step is to consider diversity an opportunity to improve an organization. [...]