Diversity in Global Business and Why It Matters

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Introduction

Before approaching the phenomenon of diversity and its connection to a company’s success in the target economic environment, one may need to consider the current taxonomy of the phenomenon as it pertains to the corporate setting. In the modern business context, two main types of diversity are typically distinguished. The innate one suggests that a team of staff members reflects upon the characteristics of customers such as their age, ethnicity, gender, and sexual orientation (Mitchell & Creary, 2009). In turn, acquired diversity suggests that a company applies the principles of inclusion based on the personal experiences of its customers and staff members so that the organization could cultivate an environment that is welcoming to fresh ideas and diverse opinions (Hunt, Layton, & Prince, 2015). In the organizational environment, it is more reasonable to focus on implementing the principles of diversity in order to develop a better rapport with employees and customers, as well as with the rest of the company’s stakeholders. As a result, one will be able to encourage relationships based on trust in the corporate environment, increasing customer loyalty, employee engagement, and overall amicability of the organizational setting.

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Body

Significance

Skill sharing

The opportunity to share experiences and promote the development of new competencies in employees is one of the foundational reasons for companies to integrate diversity into their work setting as one of its essential characteristics. Studies show that with the rise in diversity rates in organizations, staff members are exposed to a greater range of opportunities for collaboration and the development of new skills. Indeed, given the differences in cultures, practices, and overall approach toward business-related tasks, employees from different backgrounds are likely to have different frameworks for managing workplace tasks and addressing emergent issues (Cui, Vertinsky, Robinson, & Branzei, 2018). In turn, sharing the said strategies and trying new frameworks for addressing concerns such as time management is critical for improving the extent and efficacy of workplace performance (Ahmad, 2018). Research indicates that there is significant empirical support for the specified claim. According to Mitchell and Creary (2009), the application of the principles of diversity causes a noticeable increase in performance rates in companies. Moreover, the overall workplace environment becomes more open to the concept of collaboration and sharing of knowledge with the rise in diversity rates.

Service quality

The opportunity to improve the quality of services or produced goods is another crucial advantage of applying the notion of diversity to the workplace and promoting cross-cultural collaboration within it. The specified assumption stems specifically from the advantage mentioned above, namely, the rise in the number of competencies and the expansion of the skill set possessed by employees. As soon as staff members develop new approaches to managing workplace tasks, they will be able to select the strategies that allow performing the said tasks as efficiently as possible and within the shortest possible amount of time (Ahmad, 2018). As a result, the quality of services and the ensuing increase in the levels of content among target audiences will be observed. Indeed, according to Hunt wet al. (2015), the rise in the levels of inclusivity leads to a noticeable change in the quality of performance. The authors explain the described shift with the openness to developing new skills and sharing knowledge that allows one to become a better professional (Lambert, 2016).

Employee satisfaction

In addition to the increase in the levels of content among customers, the introduction of diversity into the workplace affects the rates of employee satisfaction to a significant degree. A report on the issue explains that the increase in diversity leads to higher positivity rates among staff members and encourages them to accept the required behaviors faster (Cui et al., 2018). Overall, the psychological outcomes of HRM have been proven to be much better in the environments that promote diversity and view it as a part of the corporate philosophy (Mitchell & Creary, 2009). The impact that diversity produces on the levels of employee satisfaction is truly difficult to underrate since the existing evidence points to a vast rise in the levels of content among staff members in highly diverse settings (Cui et al., 2018). Specifically, Hunt et al. (2015) make the following observation: “For minority workers, for example, the boost in satisfaction kicks in when representation exceeds 15 percent of the workforce. Where diversity recruitment is a token effort, psychological outcomes are poorer” (p. 11). Therefore, there is clear evidence that the introduction of diversity in the workplace increases the productivity of staff members due to the rise in the levels of their satisfaction.

Innovation

Another effect of promoting diversity in the workplace environment, the enhancement of innovation needs to be discussed. Innovation remains an essential part of successful performance, which is why strategies for enhancing it in the organizational environment need to be sought. In turn, the increase e in diversity spurs the rise in innovative thinking and decision-making for several reasons. The presence of staff members who are capable of providing a unique perspective on a specific issue and can share their diverse opinions is one of the main catalysts of innovation in a diverse workplace (Ahmad, 2018). According to Paul Block, the CEO of Merisant, “People with different lifestyles and different backgrounds challenge each other more. Diversity creates dissent, and you need that. Without it, you’re not going to get any deep inquiry or breakthroughs” (Hunt et al., 2015, p. 12). Therefore, the conflicting viewpoints that emerge once diversity levels are increased can be used for the benefit of an organization, namely, as a tool for increasing the extent of innovation within it.

Moreover, with the focus on diversity as the cornerstone value of a company, one can introduce the idea of incremental innovation into the organizational philosophy. As a result, an organization will be able to shape its strategy according to the changing environment of its market easily. The phenomenon of incremental innovation is crucial to the company’s ability to adjust to innovative solutions emerging in the global market. The need to develop flexibility in applying innovative tools has become especially important to operate in the digital environment, where organizations have to use every tool available to increase the extent of their brand awareness and presence (Mitchell & Creary, 2009). Thus, the role of diversity as the main driving force promoting innovation in the workplace and across the organization should be seen as essential for a company’s success. As soon as the principles of diversity are instilled into the organizational setting, one can ensure that the company’s values, mission, and vision align with tits choice of leadership strategies and the tools that it will choose when attempting to meet the specified goals. Therefore, the incorporation of diversity principles should be considered a pivotal moment in any organization’s journey to success.

Strategies

Exploring the strategies that one can implement when promoting diversity in the workplace, adjustments to the existing framework for recruitment and selection come to mind. Indeed, unless provided with an opportunity to approach job openings in a certain company, the representatives of diverse cultures will be incapable of becoming members of the organization. Thus, the HRM practices, especially those concerning recruitment and selection, have to be checked for being fully devoid of any biases concerning the origin and similar characteristics of candidates.

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In addition, the use of talent management techniques aimed at increasing the levels of diversity in the workplace will be needed. Outsourcing seems to be the most common and quite effective strategy for building diversity within the workplace. Implying shared experience and active cross-cultural collaboration along with cross-cultural communication, the approach based on outsourcing is likely to increase diversity rates significantly. However, to ensure that the rise in diversity remains in its place and will not represent temporary changes, a company will have to hire diverse staff members and ensure that their culture-specific needs are met. The latter goal may include shaping the workplace benefits package in a way that will acknowledge diverse staff members’ specific needs, such as religious practices and the need for specific holidays (Ahmad, 2018).

Nevertheless, the needs of employees from diverse backgrounds are not restricted to the presence of benefits that will allow them to receive the same opportunities as the rest of the staff members. In order to ensure that employees from culturally diverse settings view the organization in question as to the company in which they can focus on career development and professional growth, the firm will have to offer chances to address professional development from the perspective of gaining new skills and competences. Apart from using collaboration between staff members as the means of helping them to gain new skills, the company will also have to offer opportunities for professional development, which will include professional training and courses aimed at increasing employees’ competencies. Thus, staff members from diverse backgrounds will be willing to become a part of the company’s workplace.

Customer orientation

Another argument in favor of deploying the principles of diversity in the workplace concerns the opportunity to improve relationships between the firm and its target customers. Namely, the incorporation of the principles of diversity allows reinforcing customer orientation as the principal guideline in managing workplace objectives and tasks. According to Mathur et al. (2016), the rise of diversity in the workplace depends on the extent to which the company’s employees follow the standards of Organizational Citizenship Behavior (OCB). Implying a compromise between the needs of staff members and the goals of an organization, the specified principles allow employees to attain high efficiency in the workplace by following corporate standards and accepting organizational values, at the same time retaining and using their unique personal characteristics (Cui et al., 2018). With the increase in diversity, the unique properties of staff members become increasingly more varied, which allows performing the key tasks even more effectively and leads to even greater outcomes (Hunt et al., 2015). Therefore, the incorporation of the notion of diversity allows focusing on the requirements of customers and the existing standards for quality much closer than the traditional approaches do.

Moreover, the same research indicates that the use of the principles of diversity leads to improved self-monitoring in staff members. The described characteristics of diversity as the tool for increasing the extent of customer orientation is to be expected of deploying the concept of diversity in the organization since the focus on customers and their needs will imply that staff members will approach their work tasks in a more diligent and careful manner. As a result, the willingness to meet the company’s quality standards and prevent instances of mismanaging workplace tasks is to be expected of employees.

The enhancement in the levels of self-monitoring is especially important as a part of the organizational change that will occur with the increase in the levels of diversity in the workplace. Namely, the rise in the levels of self-monitoring will allow building the sense of corporate social responsibility in employees and ensure that they fully recognize the role and function that they play in the organization. Although viewing one’s significance as an employee in the grand scheme of the company’s business goals might seem unnecessary and irrelevant to the quality of one’s performance and the following customer satisfaction, the specified notions are connected quite closely. As soon as employees recognize the weight of their responsibilities, they are unlikely to approach them light-mindedly; quite the contrary it is expected that the extent of self-control and the timely management of workplace tasks is expected to follow the enhancement of the specified aspect of diversity.

Customer Relationships

The importance of maintaining customer engagement and increasing buyers’ loyalty toward the brand is not to be forgotten. With the focus on diversity, an organization will be able to appeal to a wide range of its target audiences. Moreover, the firm will have a clearer understanding of its customers’ needs and the ways of satisfying the said needs in an effective manner. Therefore, the focus on diversity is expected to improve customer relationships significantly. Namely, a company can determine the manner in which it can appeal to the target demographic with its brand. In addition, with the emphasis on diversity, a firm will be able to understand what language should be used when introducing its product to its customers.

The role of diversity in improving the relationships between customers and a company becomes especially poignant when a firm elaborates on the idea of expansion and plans to enter the market of a different country. In the scenarios where the culture of the target country is strikingly different from that one of the one from which the company originates, the process of adjusting to the needs of its new clientele may take very long. However, the incorporation of diversity principles into the organizational environment will inevitably spark the necessity to introduce detailed research into the needs and culture-specific requirements of the target audiences. As a result., companies will be able to choose the language that will help to represent their product best, as well as adjust their product in a way that will increase the extent of customer satisfaction (Brimhall & Mor Barak, 2018). Therefore, diversity is likely to cause a massive increase in customer satisfaction rates, causing an organization to improve its performance and observe a rapid increase in consumer loyalty toward its brand product.

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In fact, the effects that the introduction of diversity has on customer relationships is, perhaps, one of the key changes that an organization should consider first when implementing the concept of diversity as the basis for its decision-making and communication. Specifically, the inclusion of diverse cultural principles and standards for communication opens a plethora of opportunities for bolstering the quality of communication with the target audiences. The described alteration in the company’s performance has especially strong weight when a firm attempts at entering a new market in a culturally different environment. Once the cultural settings become unfamiliar, it is critical to introduce diversity into the organization and encourage the cross-cultural dialogue that will allow a firm to gain an immediate understanding of the cultural specifics of the target setting. Thus, the attempt at entering a new market will be successful. Specifically, the principles of diversity have to be used to familiarize the organization with the key methods of communicating its values to the target audiences, the cultural signifiers that should be incorporated into its promotion campaign, and other important elements of communication that will help to establish the dialogue and prompt the further conversation.

Innovation and Decision-Making

Along with a change in the approach toward quality management, the focus on diversity is bound to shape the company’s perception of innovation and the framework for decision-making in the workplace. Due to the promotion of shared learning and the enhancement of exchanging experiences, the companies deploying the principles of diversity create the environment for including innovative techniques and strategies for attaining business goals. Indeed, staff members with more diverse backgrounds may introduce insights that are quite innovative for an organization, thus inspiring its further progress.

Indeed, with a diverse team, opportunities for broader thinking are created. Since each group in a diverse team has culture-specific experiences that it can share, a range of decisions will be improved, and an array of new pathways to solving problems will be discovered. In fact, the opportunities that the company may have overlooked in the past will become evident once diverse staff members provide their point of view on the subject matter. Consequently, the promotion of diversity will inevitably lead to better decision-making due to the rise in the number of options and perspectives that the organization will be able to consider.

Moreover, with the focus on diversity, a company will become open to accepting the philosophy of innovation as the basis for its decision-making. The specified change, while being quite vast and requiring a tremendous amount of resources, will allow a firm to transition to an entirely new plane of decision-making and management of organizational tasks, including the ones associated with the HRM processes. Namely, the introduction of the principles of incremental innovation will allow the company to introduce changes regularly to its environment as soon as new ideas, technologies, or methodologies are introduced into the target environment (Ahmad, 2018). The specified perspective will allow a firm to avoid the shock that comes with the necessity of an instant adjustment to the newly altered market setting.

Issues

Unfortunately, even the phenomena as positive as diversity in the workplace may also imply having to deal with a greater number of responsibilities and new issues in the organizational setting. Namely, the probability of cross-cultural conflicts in the workplace is likely to rise even in circumstances that involve high preparedness and awareness rates. Due to the differences between the cultures and the absence of direct correlates for denoting certain ideas or objects in each, the threat of misunderstandings, misconceptions, and the resulting confrontations will increase (Cui et al., 2018). Thus, as a manager, one has to accept the responsibility of navigating workplace relationships to introduce appropriate preventive measures, as well as manage the emerging conflicts and resolve them successfully. Specifically, as a leader, one will have to focus on finding a compromise rather than creating an environment with polarizing opinions. While the latter may be useful for evaluating every possible solution for a particular issue, it also creates a breeding ground for internal conflicts and unnecessary rivalry between staff members.

Another possible source of concern in a diverse workplace environment, the threat of losing productivity a needs to be discussed. Although the introduction of diversity into the workplace environment typically leads to an increase in the extent of performance in the workplace, it may lead to the opposite results when implemented in an uncontrolled manner. As a result, the process of adjustment to the new settings and requirements is going to be much rougher than it would have been otherwise, which will lead to difficulties in performing key workplace tasks and, thus, an inevitable drop in performance rates.

However, the issues described above should not discourage managers and dissuade them from implementing the ideas of diversity in the workplace. Instead, the problems listed above should be considered as hindrances that can be addressed once an efficacious framework for managing human resources is established. With the adoption of a people-oriented approach, an organization will be able to deploy the philosophy of diversity properly and avoid hurdles in establishing the related policies and workplace processes.

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Solutions

As shown in the problem description above, the issue of cultural misconception seems to be the problem of the highest priority in a diverse workplace setting. Therefore, it is crucial to introduce the philosophy of peaceful resolution of conflicts and the idea that every confrontation represents a perfect learning opportunity. Thus, one will be able to connect the significance of innovation with the principles of diversity, at the same time avoiding the threat of staff members experiencing regular culture clashes.

Counterargument

When addressing the issue of diversity in the workplace and the effects that it produces, one needs to admit that the described effects are not immediate and are likely to require additional support to be developed. Although diversity does produce a positive effect on the extent and velocity of employees’ performance, the outcomes mentioned above will not necessarily reveal themselves immediately. In order to spark the process and enhance the natural development of the phenomena mentioned above, one has to provide guidance, support, and directions to staff members. The specified goal can be implemented by revisiting the existing HRM framework deployed in the company. Specifically, by introducing a direction into the staff members’ performance and promoting the ideas of unity, collaboration, and knowledge sharing, one will be able to reinforce the effects of diversity and prompt the acquisition of crucial skills.

Finally, when considering the issues that the active promotion of diversity might entail, one should consider the clash between the subject matter and the notion of shared leadership. By definition, the concept of shared leadership implies that every staff member is invited to accept the role of a leader and participate in critical decision-making affecting a specific aspect of a company’s performance. Implying a greater extent of responsibility, the notion of shared leadership contributes to building unity and cooperation in the workplace (Brimhall & Mor Barak, 2018). In turn, with the rise in the levels of organizational diversity, the extent of dissimilarities between staff members may prevent them from sharing roles in the organizational setting due to perceived differences and incongruences in the culture-specific interpretations of particular issues, according to Xu, Chiu, and Treadway (2019). Therefore, the promotion of diversity in the workplace needs to be coordinated very carefully to avoid the development of cultural conflicts.

Rebuttal

Nonetheless, the positive effects of diversity in the workplace cannot be doubted in any way. Even though the business- and performance-related effects that diversity increase will produce may take more time than expected, the change itself will entail the creation of a healthier environment for staff members. As a result, a company deploying the principles of diversity will shape its HRM approach toward a people-oriented one, which already is an important change.

As for the amount of time that it takes for the effects of diversity to settle in the corporate context, one could claim that the specified course of changes is the most natural one since it allows the change to take place and its effects to settle. Thus, staff members can get used to the alterations in their work routine and the necessity to deploy the strategies that are different from those to which they are used.

Conclusion

Due to the opportunities to promote equity within the workplace environment, as well as the chances to appeal to new target audiences and attract new customers, diversity should be considered a crucial aspect of any company working in the global market. Once a firm enters a new economic environment and makes an attempt at operating in a different country, or outsources its human resources from a different state, the necessity to change the approach toward communication in order to include a more culturally sensitive framework emerges. The advantages of applying the principles of diversity to the organizational setting are numerous. Some of them include the opportunity to improve the quality of a company’s performance, the chance to update the relationships between an organization and its stakeholders, including its target buyers and staff, and the chance to address communication concerns. Moreover, the incorporation of diversity principles entails the opportunity to prompt the development of innovative thinking and decision-making in a firm.

The latter represents a particularly important opportunity for an organization and an especially significant argument in favor of diversity. With the inclusion of innovation-driven strategies into the workplace setting, one is likely to observe a rapid change in employees’ attitudes and the approaches that they utilize to perform decision-making. Finally, diversity creates a perfect platform for the improvement in performance quality due to the promotion of experience and knowledge sharing. Once the principles of outsourcing and other options for cross-cultural communications are introduced, a firm will receive a chance to provide its staff members with learning opportunities and incite the cross-cultural dialogue that will lead to exchange in experiences, knowledge, and skills. As a result, the extent of employees’ competencies and the number thereof are expected to increase.

Overall, the role that diversity plays in the corporate setting is truly huge. Once the ideas associated with diversity are introduced into the organizational setting, opportunities for increasing productivity and the extent of staff members’ workplace efficacy begin to emerge. Therefore, the incorporation of the principles of diversity into the organizational context should be viewed as a crucial opportunity. Moreover, the introduction of diversity into the organizational setting has a direct effect on the levels of innovativeness in a company and the extent to which staff members perceive innovation as an important part of their workplace routine. Therefore, the concept of diversity has to be integrated into the organizational environment and become a critical part of the corporate philosophy. Thus, the opportunities for a company to expand into other markets and to improve the relationships with its own staff will be presented.

References

Ahmad, F. (2018). Knowledge sharing in a non-native language context: Challenges and strategies. Journal of Information Science, 44(2), pp. 248-264.

Brimhall, K. C., & Mor Barak, M. E. (2018). The critical role of workplace inclusion in fostering innovation, job satisfaction, and quality of care in a diverse human service organization. Human Service Organizations: Management, Leadership & Governance, 42(5), pp. 474-492.

Cui, V., Vertinsky, I., Robinson, S., & Branzei, O. (2018). Trust in the workplace: The role of social interaction diversity in the community and in the workplace. Business & Society, 57(2), pp. 378-412.

Hunt, V., Layton, D., & Prince, S. (2015). Diversity matters. New York, NY: McKinsey Company.

Lambert, J. (2016). Cultural diversity as a mechanism for innovation: Workplace diversity and the absorptive capacity framework. Journal of Organizational Culture, Communications, and Conflict, 20(1), pp. 68.

Xu, N., Chiu, C. Y., & Treadway, D. C. (2019). Tensions between diversity and shared leadership: The role of team political skill. Small Group Research, 50(4), pp. pp. 507-538.

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BusinessEssay. "Diversity in Global Business and Why It Matters." January 18, 2022. https://business-essay.com/diversity-in-global-business-and-why-it-matters/.