The focus on diversity in the modern business world is a result of globalisation trends and changes in approaches to managing the workforce in multinational organisations. Laws against discrimination in the workplace, emancipation, intensified migration, and globalisation have led to the increases in the employers’ interest to the diverse workforce as the power to achieve the competitive advantage in the modern business environment (Herring 2009, p. 209). Despite the variety of benefits for employers to improve their competitive advantage while concentrating on the diverse workforce, there are many barriers associated with managing diversity in multinational organisations (Gotsis & Kortezi 2013, p. 949). In this context, speaking about the role of employee diversity in multinational organisations, it is necessary to focus on such observable characteristics as age, gender, and race and such non-observable characteristics as attitudes, values, and beliefs that make the workforce diverse.
Thus, the task of an effective manager is to organise the work of the diverse staff to improve the organisation’s performance. As a result, proponents of the idea that the diverse workforce is a step toward the success of a multinational organisation point at the benefits of managing diversity when the critics of the idea claim that there is a problem in overcoming organisational barriers associated with the diverse workforce (Dijk, Engen & Paauwe 2012, p. 74; Garib 2013, p. 19). Therefore, although there is a strong business case for supporting the diverse workforce in multinational organisations, it is important to pay attention to both positive and negative aspects of managing diversity in companies to achieve the competitive advantage.
Surface-Level Diversity in the Context of Multinational Organisations
Multinational organisations need to work with the diverse workforce because of the variety of geographic and socio-economic environments where the companies operate. From this point, the business case is based on the economic benefits of managing a diverse workforce in companies. While responding to the diversity of employees, managers develop strategies according to which they respect differences in languages, cultures, and ethnic traditions and visions. The benefits of addressing these differences are in addressing the expectations of diverse customers, addressing the global markets’ tendencies, and in increasing profits (Gotsis & Kortezi 2013, p. 952; Singh & Point 2006, p. 365). For instance, Adecco manages diversity to develop the ‘best practice’ for the company and achieve the highest profits (Singh & Point 2006, p. 369). In this context, diversity can add to forming the specific inclusive culture necessary for the progress of the multinational organisation.
Focusing on the cultural and racial composition of the workforce in multinational organisations, researchers speak about the surface-level diversity that also includes the employees’ differences in age and gender (Herring 2009, p. 209; Phillips & Gully 2011, p. 41). From this point, surface-level diversity is based on differences in observable characteristics of employees (Phillips & Gully 2011, p. 41). According to Herring, cultural and racial diversity is a good choice for the business because “it offers a direct return on investment, promising greater corporate profits and earnings” (Herring 2009, p. 219). However, positive outcomes are expected only with references to the effective management because “ethnic diversity without active and good diversity management may lead to poorer performance, because of increased conflict with the majority and withdrawal of involvement by minority individuals” (Singh & Point 2006, p. 376). As a result, managers can add the value to the organisation’s progress while treating employees individually and while developing the performance appraisal and assessment tools referring to differences in the staff’s cultural and ethnical backgrounds (Swiercz et al. 2012, p. 28). These practices are important to respond to the employees’ basic but diverse needs and interests.
From the perspective of employees, observable ethnic, cultural, age, and gender differences rarely negatively influence the interaction of the diverse workforce in groups and teams. The main barriers that can prevent employees from effective cooperation are significant differences in religiously influenced views and languages (Phillips & Gully 2011, p. 47). To create the advantage, managers should focus on training the employees in multinational organisations regarding the aspects of diversity and specific differences in employees that are typical for a certain organisation. For instance, the employees in the European and U.S. companies work better when the aspect of diversity is mentioned in the corporate statement of vision (Singh & Point 2006, p. 372). Thus, employees need to see that their differences are respected, and the proclaimed diversity contributes to the company’s progress.
Individual Differences in Employees’ Attitudes, Values, and Perception
Even though the surface-level diversity is important to be discussed in the context of managing diversity in multinational organisations, more attention should be paid to the role of individual characteristics of employees that are differences and similarities in attitudes, values, and perception because these individual features influence how employees cooperate and see the corporate goals (Heitner, Kahn & Sherman 2013, p. 68). From the perspective of managers promoting diversity, the business case for hiring the diverse workforce is in the fact that differences in attitudes, values, and perception contribute to effective decision-making and productivity. While focusing on the diverse workforce, managers can receive access to more talented potential employees (Bendick, Egan & Lanier 2010, p. 469).
Having different attitudes and values, employees can create the flexible and creative teams that are focused on producing effective solutions and products in the changing working environment (Bendick, Egan & Lanier 2010, p. 471). In this context, Herring states that “diversity enriches the workplace by broadening employee perspectives, strengthening their teams, and offering greater resources for problem resolution” (Herring 2009, p. 208). Nevertheless, to receive the benefits of focusing on individual differences of employees, managers need to focus on the employees’ different knowledge, levels of expertise, and work experiences as associated with their individualities rather than directly point at differences in the diverse employees’ opinions, values, and attitudes (Garib 2013, p. 23). The explanation of this approach is connected with the employees’ visions of their differences.
The problem is in the fact that employees often see their differences as barriers to communication and effective cooperation. From this point, diversity in attitudes, values, beliefs, and perception decreases the group cohesiveness. The possible negative outcomes are the increases in employee turnover and the ineffective work of teams. From this perspective, the employees are different in attitudes and opinions they express toward various issues (Dijk, Engen & Paauwe 2012, p. 75). In this case, diversity can be “of added value for an organisation if these different opinions do not represent the different values or different attitudes employees might have” (Garib 2013, p. 29). Employees can experience significant difficulties while working in culturally and ethnically diverse groups and teams because of differences in values, visions, and attitudes. The task of a manager is to motivate employees to express different opinions to formulate the best strategy. Still, it is also necessary to promote the “values of trust, respect, and loyalty” that are typical for the concrete organisation (Garib 2013, p. 30). Thus, there are both positive and negative effects of the employees’ diverse visions and attitudes on the organisation’s progress, and the outcome depends on the manager’s effective strategy.
Issues of Stereotyping and Prejudice
Although there is a strong business case for having the diverse workforce in companies, there is also a range of issues associated with the problem of stereotyping and prejudice typically for the practice of managers working in multinational organisations. It is important to state that not only individual perceptions of employees matter while discussing the aspect of diversity. The diversity perceptions of managers are also meaningful because managers can manage diversity “based on how they view diversity” (Garib 2013, p. 28). Therefore, the problem of stereotyping depends on the managers’ perceptions of the diverse workforce and its role for the company. While focusing on attracting the diverse, talented workforce, managers often cannot avoid stereotyping based on their visions of cultural and racial differences (Garib 2013, p. 19). As a result, managers in multinational organisations choose to categorise employees according to the subjective visions or stereotypes that are mainly related to observable features (Garib 2013, p. 20). Stereotypes developed by managers regarding the employees’ age, gender, appearance, race, and culture lead to developing conflicts between the employees because of the issue of disparity.
Although discrimination in the workplace is prohibited according to Title VII of the 1964 Civil Rights Act, developed stereotypes can be discussed as the first step to prejudice against different ethnic, cultural, and social groups of employees (Herring 2009, p. 209). For instance, researches demonstrate that Blacks and Hispanics are “believed to be less competent, intelligent, and hard-working” than Whites; and Whites are stereotyped as “intelligent, successful, and educated”; also, Asian Americans, are stereotyped more positively than Blacks and Hispanics as “hardworking and loyal employees” (Ely, Padavic & Thomas 2012, p. 343). These stereotypes prevent managers from evaluating the work of the employees effectively and provoke the conflicts in organisations instead of promoting cooperation because of accentuating the role of employees according to their gender, age, ethnic, and cultural characteristics when it is important to focus on the work competence and experience. To gain more profits while promoting the idea of diversity in multinational organisations, it is necessary to avoid stereotyping during the recruitment and selection process and during the assessment of the employees’ work (Dijk, Engen & Paauwe 2012, p. 76). In this case, it is impossible to speak about the achievement of business profits when managers discuss the diverse workforce referring to the limited and stereotypical visions associated with the little information on culture or race.
The Role of the Manager in Working with the Diverse Workforce
While focusing on the issue of stereotyping as the barrier toward the effective management in multinational organisations with the diverse workforce, it is important to accentuate the role of the manager in regulating the work of employees belonging to different cultural and ethnic backgrounds, having differences in age and gender, and having different attitudes and beliefs. Researchers support the idea that the business case for having the diverse workforce in a company is directly associated with the competence and abilities of a manager regarding the creation of an atmosphere of mutual respect and cooperation (Bendick, Egan & Lanier 2010, p. 469). For instance, the leaders of Electrolux in Sweden state that effective diversity management is a step to increased profits (Singh & Point 2006, p. 369). From this point, the role of a manager is important to develop the diversity-oriented approach in the company.
Discussing the role of a manager in promoting diversity, it is necessary to define the diversity management as an approach to respect differences in employees, support the employees’ diverse visions and attitudes, and create the collaborative workforce addressing the principle of globalisation (Garib 2013, p. 18). According to Garib, discussing the diversity in the organisation by “counting the amount of people with a different race, gender, function, background, generation from the majority group might not be the best way to understand what type of effect that diversity will have on the organisation” (Garib 2013, p. 22). Thus, the diversity management can be considered as effective when managers can “display ethical sensitivity to the needs of vulnerable members, allow a better accommodation of differences, mitigate extreme inequality and shape a compassionate work environment through benevolent practices, thus initiating a process of sustainable change” (Gotsis & Kortezi 2013, p. 965).
Furthermore, Heitner, Kahn, and Sherman proposed the indicators to state that the organisation follows an effective approach to managing diversity. These indicators are “social responsibility, community outreach, multicultural marketing, advertising, and recruitment efforts” made by managers in companies (Heitner, Kahn & Sherman 2013, p. 69). Following the researchers’ findings, it is possible to state that effective managers can add to the organisation’s progress while valuing diversity and while focusing on the role of the diverse workforce within the context of globalisation.
From the employees’ perspective, an effective manager is a person who can address the individual needs of employees with different backgrounds while valuing their opinions, talents, experiences, and skills, accepting differences, and preventing conflicts. It is a challenge for employees having different values to communicate and work as a team to achieve the corporate goal and gain more profits for the company (Ely, Padavic & Thomas 2012, p. 344). Therefore, the critics of the idea that the diverse workforce is necessary to achieve the competitive advantage point at the necessity to implement effective managerial techniques, practices, and strategies to organise the diverse employees as a collaborated team (Bendick, Egan & Lanier 2010, p. 470; Singh & Point 2006, p. 369). Positive outcomes of such cooperation of the diverse workforce are important, and the manager’s task is to organise the work of the employees to avoid bias and promote the effective interaction of workers.
Recommendations to Promote Diversity in Multinational Organisations
Although there are many arguments provided by the critics of the idea that there is a strong business case for having the diverse workforce in multinational companies, managers can achieve the corporate success while focusing on several effective diversity management practices. First, to gain benefits from promoting diversity in multinational organisations, it is necessary to avoid stereotyping and focus on equal opportunities management (Singh & Point 2006, p. 369). Second, managers need to implement diversity-friendly practices and concentrate on the diversity training for employees to expand the opportunities for the diverse workforce to work in teams, cooperate, and provide creative solutions and innovative visions (Gotsis & Kortezi 2013, p. 964; Swiercz et al. 2012, p. 26). Furthermore, “the organizational culture should value diversity through top management support” (Heitner, Kahn & Sherman 2013, p. 69). In this case, the approach to managing the diverse workforce can be full, and the business benefits can be achieved rather quickly by companies where their workforce is heterogeneous.
It is also important to state that organisational success also depends on the position taken by managers concerning the discussion of the diverse workforce. According to Garib, “the more managers perceive employee diversity as representing the various levels of expertise of employees, the more positive organisational outcomes are perceived” (Garib 2013, p. 26). In this case, the strong business case for supporting the diverse workforce in companies is associated with the vision that each member of the organisational team brings important experience to the company’s problem-solving process.
From this point, the best strategies and approaches for managers to promote diversity in multinational organisations is to value diversity positively; to implement perfectly-developed diversity practices; to align management practices with the companies’ approaches to values and visions; to avoid stereotypic representations; to promote advantages of the diversity of the workforce while preventing conflicts; to value the opinions of the minority ethnic groups and discuss them as contributing to the corporate problem-solving strategy (Dijk, Engen & Paauwe 2012, p. 74; Gotsis & Kortezi 2013, p. 949; Heitner, Kahn & Sherman 2013, p. 58). It is also necessary to encourage cooperation and formulate the corporate values in organisations according to which the diversity in the organisation is respected and actively promoted.
There are several perspectives from which it is possible to discuss the strong business case for having the heterogeneous workforce in multinational organisations. On the one hand, the diverse workforce in the company is the key to increasing profits and investment while focusing on the idea of globalisation. On the other hand, the improperly managed diversity in organisations leads to developing stereotypes that are typical for managers and employees, to conflicts in the employees’ teams, and the ineffective work of the diverse workforce associated with the inappropriate performance evaluation made by managers. In this context, much attention should be paid to the role of managers as the key force to promote the idea of diversity in the multinational organisation and to contribute to creating a competitive advantage. From this perspective, the business case for having the heterogeneous workforce in multinational organisations is rather strong. Still, it is important to refer to the role of a manager in developing specific strategies and practices that are necessary to stimulate the positive aspects of diversity and to prevent conflicts and possible misunderstandings in the working groups and teams.
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