Introduction and Thesis Statement
Employing a multicultural workforce has been previously shown as extremely beneficial decision for companies, and is required in many circumstances, principally when companies engage in international operations. However, cultural diversity in the workplace poses significant managerial challenges, as traditional management methods may not be appropriate in a multicultural environment (Jacob, 2007) and may lead to inferior results. To maximize the benefits and minimize the costs of such as organizational structure, it is imperative to analyze the cultural and social processes that are related to cultural diversity. Such an analysis should bring in turn the practical and conceptual frameworks, which should assist managers to develop proper means of handling the challenges and maximizing the opportunities.
Considering the great variety of situations managers can face with multicultural teams, it is impossible and also fundamentally wrong to assume that there is a panacea, or some miraculous “5-step-model” to examine and manage those challenges. Instead, it would be much more efficient to focus on specific issues and to consider the different aspects of each item in greater detail. Thus, the purpose of this paper is threefold:
First, it provides the theoretical and conceptual frameworks, which are needed to understand the multicultural workforce in the context of teamwork and communications in large companies. Second, it brings findings from the recent body of empirical research and case studies to discuss possible ways in which workforce diversity affects the two aspects of organizational behavior mentioned earlier. Third, insights from the two following objectives are used to project potential effects on communications and teamwork at Worldwide Telecommunications, Inc., a multinational provider of telecommunications solutions for the hospitality sector. Finally, the closing section of this paper elaborates several recommendations, which should help the company to manage its multicultural workforce better.
The Tradeoff Between Individual and Organizational Cultures
When we come to examine a given company’s organizational culture – the somewhat elusive and hard to follow set of values, attitudes, perceptions, and narrative – we must first consider its sources. Generally speaking, the predominant culture in any given organization (or a part of it) can always be linked to two sources, namely the internal and the external cultural forces. The internal effects relate to the organization’s artistic definitions for questions of work, language, interpersonal relations and so on. The foreign powers, whose influence must not be neglected, relates to the cultural background(s) of the members of the organization.
To understand the uniqueness of the multicultural workforce in large organizations, we must first realize that an organization’s performance is directly linked to its culture, whereas the latter absorbs features from both external and the internal cultural sources. Furthermore, we can expect that the organizational culture as a whole and each one of its components can resemble features from one of the causes or serve as a compromise (i.e., a synthesis) between its sources. Following the same logic, a multicultural workplace should have as many inputs as the number of different cultures that build it. Hence, the tradeoff, or synthesis, of several different cultures at the same time is much more complicated and requires careful attention.
Human Resource Orientation towards Multiculturalism
Although the tradeoff described above is unavoidable, its intensiveness is mainly dependent on the organization’s orientation towards multiculturalism. The human resources literature defines three main types of adjustments, whose influence on organizational culture and workflows is substantial. Managers of multinational companies tend to follow ethnocentric, polycentric or geocentric orientations towards the tradeoff between internal and external perceptions:
The ethnocentric orientation advocates the supremacy of the organization’s home culture, under the logic that the company knows better than other religions how work should be done. For example, McDonald’s has a rigorous culture and policies, which do not differ significantly among the different regions in which it operates. As a result, employees at McDonald’s all over the world must comply with the American work culture, whereas their religion is suppressed. This approach brings about enormous conflicts among the workforce, as managers in Mexico, for instance, may enforce a workday that starts earlier and last longer than the Mexican grasp of working time (Karadjova-Stoev & Mujtaba, 2009).
In sharp contrast, a polycentric orientation is more open to the influence of external cultures, assuming that a more considerable resemblance between the organization’s culture and the culture in which it operates will lead to superior results. Theoretically, it should be expected that such orientation would result in lower cultural tension, as people work in a familiar environment. In a multicultural workforce, however, the lack of central guidance may bring more harm than good, as each member will try to “pull” the organizational culture closer to its own.
In some cases, companies pursue a regiocentrism, which is similar to the polycentric approach, but focus on regions instead of single countries. For example, many multinational corporations operate joint operations for the whole Central and Eastern Europe (CEE) from one regional office. Needless to say that this division, which follows the formation of the Communist Bloc in Europe, is quite controversial as it treats Baltic, Slavic, and other cultures as one part. Such offices require incredibly multicultural workforce; without strong internal culture, we should expect a synthesis of local customs, which may bring about numerous conflicts but also beneficial cultural inputs to the workforce.
A similar set of opportunities and challenges can also be expected in companies, which pursue a geocentric orientation – a tendency to adopt the best of every culture. This approach has many advantages, but it necessarily results in the organization’s attempt to implement many aspects of alien culture in the local workplace. It is thus heterogeneous at the organizational level, but creates a new kind of ethnocentrism at the team level, regardless of the members’ own cultures and backgrounds.
Empirical Findings on the Influence of Multicultural Workforce in Big Companies
After examining the reciprocal relations among the cultures of the organization, the individual and multicultural workforces, we can take a closer look at the ways the cultural tradeoff affects work. Kenig argues that an enormous influence on large American companies can be linked to three areas of “cultural preferences: Our approach to work, the way we share information, and how we view time” (2008). This general statement can assist the interpretation of the three cases described below, although there is, of course, a full range of issues that arise from the accumulated experience of scholars and practitioners.
American Ethnocentrism in France: The Failure of Euro
Disney’s HR Policies
Determining that “ethnocentric approach to management and global operations simply does not work together,” (p. 76), Karadjova-Stoev & Mujtaba (2009) tie Disney’s failure to the French market to the weak propensity to receive cultural inputs from its local workforce, or in the authors words, “lack of HR strategic partnership” (p. 71). Simply put, Disney’s American executives made a series of wrong decisions (regarding both internal and external customers), which have lead to significant flaws in the park’s operational policies. For example, the company’s miscalculation of the European food consumption, per-capita spending and vacation habits, which were entirely different from the American culture, brought about low customer satisfaction and more economical than expected revenue for the park.
Moreover, what seems to be as some managers’ attempt to “Americanize” (ibid., p. 73) the French workforce resulted in devastating outcomes. Issues such as regularly changes in the length of work, dress and physical appearance codes and what perceived to be a disrespectful attitude of the American executives lead to communication breakdowns, high tension and even legal actions taken by the employees. The profound misunderstanding of Disney regarding the French culture caused to a nation-wide backlash, which obliged the company to change many of its HR and business practices in the country.
Teamwork and Communication in Credit Swiss’s Project Copernicus
In her review on Project Copernicus, a banking initiative in Singapore that employed managers from 18 different countries, Jacob (2007) discusses the fundamentals of proper multicultural management. The author praises Credit Swiss’s willingness to delegate its working methods and famous “Swiss Efficiency” (ibid., p. 66) to allow fluid structures and significant influence of the underlying cultures. That is, the organization allowed its members to refine work and communications in ways of symbiosis among the members.
Considering the cultural tradeoff discussed above, it appears that cultural-based difficulties among staff members were somewhat minor, thanks to their ability to find alternative ways of working. Such circumstances lead to a continuous dialectical process among staff members, where each member influence the overall organizational culture (at all levels) and is controlled by other cultures. Nonetheless, such operations cannot work without the same degree of cultural openness within the members as they receive from the organization.
Specific Dimensions of Influence on Managerial Performance
Organizations of all sizes and parts of them are exposed to numerous cultural features that may affect work. Not surprisingly, the cultural backgrounds of managers are among the most influential and require thorough consideration. In a large Meta-analysis on multicultural workforces, Shoobridge (2006) indicate several areas, in which empirical studies have found the most excellent effects. Some of these areas are:
- Geographical provenance: cultural and ethnic backgrounds were shown to influence entrepreneurship, managerial and career development propensities. For example, Afro-Asians may strive to become team leaders (arguably to prove success to their families), whereas people of Indian origin may tend to delegate control for the sake higher income (i.e., to specialize and not to lead).
- Cultural openness: cultures that advocate ethnic and cultural segregation are more likely to generate managers, who are less willing to internationalize, regardless of the business logic.
- Cultural Diversity in the Workplace: more than a few studies show that multicultural teams tend to bring better business results. One possible explanation for this phenomenon is the classical economic principle of diversification.
- Family values: a highly influential cultural factor, which has been proven as more consistent than any aspect of culture, is the employee’s family background. For example, children who had a least one parent with a managerial profession are more likely to aspire to be managers themselves. As adults, they will try to imitate their parents’ behavior, attitudes, and perceptions.
In conclusion, the influence of cultures (and also families, age, etc.) is arguably higher than any other personal trait, even professional experience, and education. Based on all the findings in this section, we should consider more types of cultural backgrounds than ethnicity alone. Furthermore, although multicultural teams tend to perform better in the long run (ibid.) and to lead to higher extent of innovation (Engel & del-Palacio, 2009), multiculturalism affects teams more positively than negatively; the question, however, is how to create the right organizational structure that will promote the positive influence of such a diverse workforce.
Analysis and Recommendations: Worldwide Telecommunications, Inc.
The Challenge of Multiculturalism
As a US-based supplier of telecommunications services, whose main body of customers is the global hospitality sector, Worldwide faces three dimensions of multiculturalism. Since its customers and suppliers are of diverse cultures, Worldwide must also employ an adequately diverse workforce. As a result, Worldwide faces several cultural-based challenges, which correspond with the insights provided above:
- First, although Worldwide’s managerial and non-managerial levels entail many experienced individuals, their intentions and career expectations may be influenced by their personal and cultural background. Although it may sound obvious, it is not unreasonable to find considerable discrepancies between a manager’s willingness to extend her working day, for instance, and the company’s needs. Moreover, her reluctance to work more hours may be mistakenly perceived as disloyalty among other employees and managers, a perception that may lead to the termination of a valuable team member.
- Second, formal and informal communications (in all directions) is subject to numerous encoding and decoding errors. Those errors may result in lower productivity, more mistakes, reluctance to cooperate or even misinterpretation of (encoded) friendly gestures as (decoded) offensive expressions and behavior. A set of clear codes of communications may prevent some of these phenomena; too often, however, rigidity is the cause of many communication-related difficulties and frustration (Jacob, 2007).
Finally, we should expect some level of mutual influence among the different cultures. If Worldwide is relatively open to the impacts of other cultures’ practices, this tendency may be beneficial for all parties. Nonetheless, it is also likely that teams will adopt cultural features that are less effective than the existing practices.
The international atmosphere in which the company operates dictates a set of managerial steps regarding multiculturalism. To keep it short and precise, we can define three leading issues for immediate action:
- First, performance appraisal must consider cultural aspects, mainly when someone performs less than expected. To do so, executives with adequate familiarity with the underlying culture should participate in the appraisal process.
- Second, the organizational structure should be flexible enough to enable a dialectical process within the different cultures.
- Finally, Worldwide should offer intercultural training programs, adjusted to the different levels. Among others, such programs should deal with issues of proper encoding and decoding of messages, understanding different attitudes and allow pluralistic discussion.
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