Multiculturalism and Organizational Success

Most organizations have realized that diversity exists and that the culture of any organization must pay attention to the needs of a set of every diverse employee. In short, many managers are grappling with how to make their corporate culture more in tune with the issues of multiculturalism.

Managing the issues of diversity and multiculturalism is crucial to organizational success. Professor Taylor Cox of the University of Michigan has suggested six arguments, to support his belief that managing cultural diversity can improve organizational performance.

The cost argument says that if organizations do a poor job in managing multicultural issues they will have higher costs. The revolving door syndrome is expensive. When women and minorities leave the organization gets no return on the investment it has made in them. In addition if multicultural issues are not managed well, then people are not as comfortable as they could be in the work environment and they spend time and energy worrying about discrimination, harassment, and other issues rather than their jobs.

The resources acquisition argument says that companies that handle multiculturalism well will have an advantage over other companies in hiring multicultural workers—an increasingly important advantage in an era of Workforce 2000 demographics. The best places to work for women and African Americans has been positive for companies listed, including Merck, Xerox, Syntex, Hoffman LaRoche, and Hewlett Packard.

The marketing argument says that organizations that manage multicultural issues well have an insight into markets consisting of minority group members and women. Markets too, are diverse, and cultural issues have some effect on the buying decisions of customers. Today is successful precisely because it has a variety of people from different cultural backgrounds involved in daily news meetings.

The creativity and problem solving arguments old that groups of people from diverse backgrounds can be more creative than groups with homogeneous backgrounds, and are better at solving problems. However, steps must be taken to realize these benefits; in particular, team members must become aware of possible attitude differences in others. And there must be a core of shared beliefs or shared values around which people can express their differences.

Finally, the system flexibility argument says that the ability to manage diversity increases the adaptability and flexibility of an organization. External and internal issues can be responded to more quickly. In addition, to manage diversity successfully, an organization must questions outdated policies and procedures that emerged in days when multiculturalism was not a large concern for the organization.

Arguments for managing Cultural Diversity:

Cost Argument: As organizations become more diverse the cost of a poor job in integrating workers will increase. Those who handle this well will thus create cost advantages over those who don’t.

Resources Acquisition Argument: Companies develop reputations in favorability as prospective employers for women and ethnic minorities. Those with the best reputations for managing diversity will win the competition for the best personnel. As the labor pool shrinks and changes composition, this edge will become increasingly important.

Marketing Argument: For multinational organizations, the insight and cultural sensitivity that members with roots in other countries bring to the marketing effort should improve these efforts in important ways. The same rationale applies to marketing to sub-populations within domestic operations.

Creativity Argument: Diversity of perspectives had less emphasis on conformity to norms of the past (which characterize the modern approach to management id diversity) should improve the level of creativity.

Problem solving Argument: Heterogeneity in decision and problem solving groups potentially produces better decisions through a wider range of perspective and more thorough critical analysis of issues.

System Flexibility Argument: An implication of the multicultural model for managing diversity is that the system will become less determinant, less standardized, and therefore more fluid. The increased fluidity should crate greater flexibility to react to environmental changes (i.e. reactions should be faster and at less cost).