The global environment that multinational corporations (MNCs) are now operating in are constantly changing, becoming exceptionally complex and diverse (Hurn, 2012). Due to the changes, globalisation has caused through the butterfly effect, multiculturalism and diversity are becoming important topics for many MNCs globally (DeLancey, 2013). Numerous methods have been implemented by MNCs in order to capture cross-cultural differences in the workplace and how these can be readily applied to change management objectives in order to remain competitive and relevant in the ever-evolving business environment. This literature review will consider the significance that culture in the workplace has on implementing change strategies in MNCs and the implications and challenges that hypothetically surface due to the divergent nature of multiculturalism.
The methods used by the various authors of attaining data are reflective of the purpose of their articles. Conducting interviews; structured or semi-structured (including surveys); were primarily used by a number of authors, including Al-Hadded & Kotnour (2015), Andrews, J., et. al. (2008), Kirsch, et. al. (2012), Lönnqvist, et. al. (2009), Lysova, et. al. (2015), Osmundsen (2013), and Reissner (2011). Conversely, Hurn (2012) collected data via conducting research on change by simulation exercises undertaken in a MNC, while Erwin & Garman (2010) converged on inaugurating connections in previous literature. Logemann & Piekkari (2015)
It is no longer feasible that a corporation can successfully move through the global marketplace without learning to recognize the cultural norms of each country. It falls to the executives and managers to implement these changes and to ensure that their companies are working to move towards a more inclusive, and ultimately, more profitable way of doing business that appreciates and respects all cultures and work
The rise of multinational companies and increased global diversification by even small companies has resulted in people of diverse backgrounds and cultures working together in the same office or for the same organization. Conflict in such situations is predictable, but understanding the diversity issues can help companies implement programs designed to keep conflict at a minimum and to take full advantage of the many benefits which such diversity brings to an organization. Key to understanding how diversity is managed in multinational organizations is understanding the concept of corporate culture (which defines organizations), diversity programs and their use to minimize conflict among employees, and the unique problems that employees
Levitt (2014) defines culture as the coherent, learned, shared views of a group of people and about life’s concerns that ranks what is important, furnishes attitudes about what things are appropriate, and dictates behavior. Macy’s corporate culture possesses a diverse leadership team to target their diverse customers and locations. Diversity, based on experiences and passion, gives the Macy’s leadership team new perspectives to promote successful business. Levitt (2014) suggests organizational diversity can be considered as a mixture of people with different group identities working in the same social system. A multi-cultural team of Americans, Italians, Germans and Swiss would adapt well in the rich bouquet of culture in Zurich, Switzerland. As a new team leader, the biggest concern would be establishing integrations between the different cultures working together at Macys.
improve the diversity climate are more likely to be more effective than initiatives that lacks
Competition and globalization demands that businesses practice cultural sensitivity when aiming for successful business integration into foreign markets. According to Deresky (2011, p. 31), “competing in the twenty-first century requires firms to invest in the increasingly refined managerial skills needed to perform effectively in a multicultural environment.” Managers and leaders need to develop the ability to motivate and negotiate using appropriate multicultural tools because cultural diversity affects not only business practices but also the
In today’s society there are many culturally diverse people in the workforce. Most organizations can no longer make the assumption that every employee has similar beliefs or expectations. When entering into the global marketplace, people are considered one of the most valuable resources to an organization’s success. A well-managed culturally diverse workforce has the potential to thrive if managed correctly; or if mismanaged, there can be devastating negative attributes. With great expectations, culturally diverse employees can foster positive outcomes in the workplace. A company’s acknowledgement to embrace diversity and change, and implement the value of management techniques are
Mismanaging cultural differences can render otherwise successful managers and organisations ineffective when working across cultures. As stated byOsland (1990, p. 4) ``The single greatest barrier to business success is the one erected by culture''. Hofstede (1983) defines culture as "the mental programming of the mind which distinguishes the members of one human group from another" (Hofstede 1983 p. 25). Through the comparison of Chinese culture and Australian culture using Hofstedes five cross-cultural dimensions: power distance, uncertainty avoidance, masculinity, individualism, and long-term orientation an insightful view into the differences and similarities of the cultures can be obtained (Chong & Park 2003). Human Resource Management
An organization’s success and competitiveness depends upon its ability to embrace diversity within the workplace. The world 's expanding globalization requires more cooperation among individuals from differing societies, convictions, and foundations than any time in recent memory. Individuals do not live and work in an isolated place. They are currently a portion of an overall economy with rivalry originating from about each landmass. Consequently, benefit and non-benefit associations need diversified qualities to end up more imaginative and open to change. Managements are focused on gathering of people on the grounds that they have to perceive the routes in which the working environment is evolving, developing, and broadening. Since overseeing different qualities remains a noteworthy hierarchical test, managements must take in the administrative abilities required in a multicultural workplace.
Globalization has become the root of changing the demographic diversity of the workforce in an organization throughout the world. Diversity does not only imply race and gender, but it shows that every person is different and that their culture is characterized as individual. Individuals in an organization have their own different customs, values, and perspectives; employers must be mindful of all of these differences. Successfully managing cultural differences would allow organizations to be more competitive in recruiting individuals from diverse ethnic individuals, which will generate a cultural and friendly working environment (Grivastava & Kleiner, 2015). By adapting a multicultural organization, the organization will be characterized by a culture that fosters and values cultural differences equally amongst its employees. According to Rawat & Basergekar, (2016) achieving cultural diversity amongst companies rarely occurs, however it is important to understand and create a vision for effective diversity management. Diversity can be seen from different paradigms, which forms a company’s philosophy on diversity. Rawat et al. (2016), examines the two different paradigms that forms a diverse culture in an organization. The first is the moral paradigm a belief that discrimination is wrong, illegal and immoral. The second is the social need paradigm which believes that our solutions to diversity for a country must be different from the rest. These two paradigms bring a
The most recent studies in cross-cultural management reveal that the culture is a very expansive subject for organizations to study, especially for organizations, which hire the most diverse workforce. One definition of a diverse workforce could be as the one, which comes from different ethnic and demographic backgrounds (Plessis, 2011). For studying culture of the diverse workforce, there are two parts to study, the implicit and the explicit culture. The explicit culture includes behavior while the implicit part involves norms and values of individuals (Guang & Trotter, 2012). The explicit culture is already known when workers stay and work in a firm for a length of time, but the most difficult is to understand the implicit culture which is obscured in form of norms and values of the workers. Due to the differences of cultures, workers hold a great potential of variance, variety in terms of their explicit and implicit parts of the culture. The
Most organizations have identified factors that contributed to managers’ blindness to the impact of cultural diversity. In the twenty first century decade organization, have a direct impact on low productivity. Besides, diversity leads to ambiguity, disagreement on specific action and over complexity in the workforce. As a result, there is tension that is related to cultural diversity, which frustrates managers and cause lack of preparedness to deal with the sensitivity of cultural differences. To minimize on these impacts, managers are now addressing the challenges that factors the notion of cultural diversity; and managers are trying to transform culture to a culture of dignity, transparency, respect, fairness and trust. Cultural differences are critical issue managers face as there is an increase in cultural diversity in the workplace. This urge organizations in the twenty first century decade, to outline factors that lead to discrimination –and-fairness perspective and explore cultural differences managers display.
A Multinational Company (MNC) is “an enterprise which owns and controls activities in different countries” (Buckley and Casson, 1991, p.1). According to Buckley and Casson (1991), MNCs have very high labour productivity, which creates very high profits. They are among the most rapidly growing businesses in the world. They even argue that MNCs might have a greater impact on world affairs than the government institutions of the countries where they trade. Even with all of this in mind, they can still be subject to limitations. In the end, MNCs have to consider that they are operating in a different environment, which may have different legal and political systems, institutions, and culture (Edwards and Rees, 2006). This is also known as the
Due to the rapid development of economics and also increase in the globalisation the multinational firms are becoming more prevalent. The challenges that the present managers of these multinational firms are facing are due to intercultural communication. Many researchers say that the differences in the culture eventually influence the communication, performance and management of the organization. Organizations that are planning to expand their business in the international countries have to face various cross-cultural challenges.
Many opportunities are associated with a culturally diverse workplace and global expansion may have potential to provide just such a diverse work group. Cross-culturalism in business can provide leaders and employees with a wonderful opportunity to work with people from different backgrounds and cultures. In addition, “the more opportunities for business leaders to interact with people from different cultures, the more likely they will be to have positive attitudes from different cultures and identify, learn and apply diverse culturally-appropriate business behaviors” (Caligiuri & Tarique, 2012, p. 614). Culturally diverse environments offer a multitude of benefits including “the variety of perspectives, skills and personal attributes” (Matveeve & Nelson, 2004, p. 254). Moreover, multicultural teams have potential to “generate more ideas of higher quality in brainstorming tasks” (Matveeve &
In order to prepare a global workforce, particularly in the area of managing diversity, we must not only understand the details of commerce but have a more robust understanding of historical, social, cultural and regional trends. The new paradigm for global management includes creating and maintaining a diverse work environment in which cultural diversity is encourage and celebrated,