Managing Multiculturalism & Diversity in Organizations


Ms. Neetu Munjal
Ms. Madhvi Sharma
Kedarnath Aggarwal Institute of Management
Charkhi Dadri (Bhiwani)


Diversity in the workplace is a multifaceted concept and has become a demographical reality across the globe. Firms that are moving in the direction of creating diversity at workplace can break upon a wide range of skills including perhaps those which it may never have to use, but are likely to bail it out when its highest probability assumption about future fail to deliver results.

The paper is sub divided into two sections. The first section dealing with the multiculturalism and the second one is dealing with work force Diversity. The aims of the paper is to explain the concept of multiculturalism with the help of Hofstede Model & is focused on workforce diversity, the need to address the diversity issues and the implication for business and managers to understand and manage multiculturalism & diversity issue at workplace. The paper conclude by bringing the light on the guidelines of the diversity management that tracks the various facets of diversity issue that need to be taken care of in diversity management.


The whole globe village has become one melting pot of common culture where diffusion has become a reality, today. In this context, one needs to understand that holding on to values does not hold good if societies wish to make a movement towards becoming a member of the globe scenario. It become essential to examine the effects of cross culturalism in various societies and organizations which operate with in them and whether a common set of cultural norms can be devised to create a yardstick for measuring multiculturalism, particularly in organizational context. Multiculturalism is becoming a norm in the global companies. It brings some difficulties but the results demonstrated that cultural diversity does in fact add value and, within the proper context, contributes to firm competitive advantage. It is argued that diverse groups make better decisions. A diverse workforce enhances creativity and understanding of customers. In some industries, tight markets make it important to find the best workers and then utilize them to do the best in the organization. These best workers have very diverse backgrounds, which should not be a limiting factor a recruitment process.

Literature Review

According to Rosen and Digh (2001), Globalization, The use of multiculturalism as a competitive advantage can actualize these. Diversity offers benefits like creativity, resistance against lawsuits, political favorers, better decisions, and better knowledge of markets.

According to Wederspahn M Garry (2002): The cross border reach on corporations has been growing rapidly for the past two decades. It has now become the order of the day. These developments have given rise to new organization that brings together individuals and groups from different national and organizational cultures. Employees need to be prepare to be able to effectively handle inter cultural tasks

According to Dr. Sen Guplta Nilanjan and Choudhary Ray Manodip (2002) with the advent communication and transport, there is culture diffusion. Developing tolerance towards cultural variations has become the need of the hours. Different culture values as portrayed by hofstede research as a tool of reanalyzing organizational culture and focuses on corresponding corporate value system prevalent across the globe.

According to Singh KManish K Singh and Dutta Andrew (2003) Workforce diversity refers to the composition of work units in terms of the cultural or demographic characteristics that are salient and symbolically meaningful in the relationships among group members. Although generally thought of as the purview of management research, the topic of workforce diversity draws from and is relevant to research from sociology and psychology.

Data Sources

As the nature of the study is descriptive, so the sources of data are secondary- journals, magazines, books & websites.

Section 1

The Concept of Multiculturalism

One also needs to understand that there are number of factors which determine the issues of managing multiculturalism especially in relation to organizations. Specific cultural traits which individuals develop as a result of socialization process embedded in their own country's culture is one such factor. Managing cultural diversity in organization perhaps lies in understanding and unleashing the moral commitment on these different subcultures that are consistent with those of the organization. A research by the well-known theorist Geert Hofstede has concluded with the help of   Geert Hofstede Model (1990) that societies may differ along four major cultural dimensions:

Power Distance

The degree to which society accepts inequalities in organizational relationship. The concept assumes that ethical or unethical behavior in organizations is learnt through the process of interacting with peers rather than the superior. The practical implications stemming from the results of the application of this concept is that, in cultures where the degree of power distance is low or moderate, individual look more to their peers than to their superiors for guidance in terms of ethical conduct. This is demonstrated in table 1:

Table 1:

Power Distance Characteristics in Organizations:

Low Power Distance Culture

High Power Distance Culture

Employees are less afraid to disagree with their managers.

Employees fear disagreeing with their managers.

Close supervision negatively evaluated by subordinates.

Close supervision positively evaluated by subordinates.

Managers more satisfied with participative superior.

Managers more satisfied with directive or persuasive superiors

Uncertainty Avoidance:

The degree to which Individuals in a society feel threatened by situations that is unstructured, unclear or unpredictable. Due to differential norms and conducts of behavior or the absences of formalized codes of conduct in a given culture, individuals may experience ambiguity in organizations when faced with different culture and value system. it has been found that individual from high uncertainty avoidance cultures are more likely to consider organizational code of ethics when forming their own de-ontological norms than those hailing from low uncertainty avoidance cultures. This is demonstrated in table 2

Table 2

Uncertainty Avoidance Charterstics in Organization

Low Uncertainty Avoidance Cultures

High Uncertainty Avoidance Cultures

Employee optimism about motives behind company activities

Employee pessimism about motives behind company activities

Company rules may be broken for pragmatic reasons

Company rules should not be broken for any reasons

Loyalty to employer is not seen as a virtue

Loyalty to employer is seen as a virtue

A stronger achievement motivation

A weaker achievement motivation

Acceptance of foreigners as managers

Suspicion towards foreigners as a manager

More employee risk taking

Less employee risk taking


The extent to which individuals in a society view themselves as individuals or a part of a large group. The concept assumes that ethical or unethical behavior in organizations is sometimes determined by the extent to which individual consider the group as being more important than themselves or vice-versa. Hence employees from individualistic culture propelled by their own self interest will tend to be influenced less organizational code of ethics. This is demonstrated in table 3

Table 3:

Individualism/Collectivism Characteristics in Organizations

Individualistic Culture

Collectivist Culture

Employees are emotionally independent from the company.

Employees are emotionally dependant on the company.

Freedom  & challenges in job given more importance.

Training & use of skills in job given more importance.

Manager aspires to leadership.

Manager aspires to conformity.

Individual decision seen to be better than group decisions.

Group decision seen to be better than individual decisions.

Employees' initiative is encouraged.

Employees' initiative is frowned upon.

Employees attracted to small companies.

Employees attracted to large companies.


The extent to which a society's dominant values stress assertiveness and materialism versus concern for people and quality of life. The concept assumes that individuals from highly masculine cultures may be less likely than those from highly feminine cultures to be to be influenced by organizational codes of ethics. This is demonstrated in table 4 

Table: 4

Masculine/Feminine Characteristics in organizations

Masculine Cultures

Feminine Cultures

Greater value differences between men & women in the same jobs.

Smaller value differences between men & women in the same jobs.

Achievement defined in terms of recognition & wealth.

Achievement defined in terms of human contacts & living environment.

Employees prefer more salary to shorter working hours.

 Shorter working hours to more salary are preferred by employees

Stronger achievement motivation.

Weaker achievement motivation.

Managers more interested in leadership, independence & self-realization.

Managers less interested in leadership, independence & self-realization.

Earning, recognition, advancement & challenge relatively more important

Relationship with managers, cooperation, friendly work environment &employment security more important.

How to Manage Multiculturalism

1. Selection must be Task Related
2. Facilitate a better understanding of cross-cultural Differences
3. Develop Cooperation & mutual respect among team members
4. Distribute power according to each person's ability to contribute to the task
5. Minimize early judgments based on ethnic stereotypes
6. Trust the collective judgments of the group

Section 2

Work Force Diversity

Today's labor pool is dramatically different than in the past. A single homogeneous group no longer dominates that. People now overwhelmingly represent the workforce pool from a vast array of backgrounds and life experiences. It has become now a resource imperative for companies to have a diversified pool of talent. That's why Organizations are becoming increasingly diverse in terms of gender, race, ethnicity, and nationality.

Workforce Diversity has changed in recent years .Not long ago, diversity referred to a person's gender or ethnic group. Diversity today encompasses differences in age, tenure in an organization, educational background, sexual or affectional orientation or preference, physical abilities or qualities and social status, economic status, lifestyle, ethnicity and gender among many other characteristics.

Generally speaking, the term "Workforce Diversity" refers to policies and practices that seek to include people within a workforce who are considered to be, in some way, different from those in the prevailing constituency.

Why encourage Diversity?

Diversity is not about counting heads, but making heads count!

Organizations that mange their diverse workforce can increase their productivity substantially through many ways. Some of which are mentioned below: -

* As a Social Responsibility

Because many of the beneficiaries of good diversity practices are from groups of people that are "disadvantaged" in our communities, there is certainly good reason to consider workforce diversity as an exercise in good corporate responsibility. By diversifying our workforces, we can give individuals the "break" they need to earn a living and achieve their dreams.

* As a Legal Requirement

Many companies are under legislative mandates to be non-discriminatory in their employment practices. Non-compliance with Equal Employment Opportunity or Affirmative Action legislation can result in fines and/or loss of contracts with government agencies. In the context of such legislation, it makes good business sense to utilize a diverse workforce.

* As a Marketing Strategy

Buying power, particularly in today's global economy, is represented by people from all walks of life (ethnicities, races, ages, abilities, genders, sexual orientations, etc.) To ensure that their products and services are designed to appeal to this diverse customer base, "smart" companies, are hiring people, from those walks of life - for their specialized insights and knowledge. Similarly, companies who interact directly with the public are finding increasingly important to have the makeup of their workforces reflect the makeup of their customer base.

* As a Business Communications Strategy

All companies are seeing a growing diversity in the workforces around them - their vendors, partners and customers. Companies that choose to retain homogenous workforces will likely find themselves increasingly ineffective in their external interactions and communications.

* As a Capacity-building Strategy

Companies that prosper have the capacity to effectively solve problems, rapidly adapt to new situations, readily identify new opportunities and quickly capitalize on them. The range of talent, experience, knowledge, insight, and imagination available in their workforces can measure this capacity. In recruiting employees, successful companies recognize conformity to the status quo as a distinct disadvantage. In addition to their job-specific abilities, employees are increasingly valued for the unique qualities and perspectives that they can also bring to the table.

* Increased Market share

Increased diversity among the workforce fosters large marketshareof diverse customers and those who intentionally buy from organization that promote diversity. Therefore, a diverse workforce can tackle increased diversity in the customer base effectively.

* Increased Market share

Encouraging diversity saves the cost of unwanted turnover by providing non-monetary reason to stay with an organization. It reduces recruitment costs because companies with diversity policies and programmes are sought out by those who have such policies; And by reducing discrimination lawsuits. A company that makes employees of diverse background feel good could offset the decline in organizational loyalty.

* Increased Productivity

People who enjoy coming to work generally produce more. They believe that their work will be valued and leave to advancement. Thr research also indicate that diverse group are generally more creative and innovative than homogeneous group.

* Improved Management Quality

Including all employees in consideration for managerial position improve the pool of applicants .It also unblock some highly qualified individuals who may have been unable to advance due to written or unwritten policies that discriminated against them for one reason or another.

* Improved Recruiting Efforts

Support shortage in labor appears from time to time. Recruitment of a diverse population can offset shortage because many workers are drawn to companies that embrace diversities.

* Other Reasons

Increased Competitiveness through ease in recruiting scarce labor, increased sale to minority-culture groups, increased creativity and innovations, enhanced problem solving, enhanced organizational flexibility, increased ability to acquire resources and enhanced social responsibility-contribution to society.

How to Manage Diversity

1.Clarify Your Motivation

None of these are bad reasons, but none of them are business reasons, and given the nature and scope of today's competitive challenges, only business reasons will supply the necessary long-term motivation.. In business terms, a diverse work force is not something your company ought to have; it's something your company does have, or soon will have. Learning to manage that diversity will make you more competitive.

2. Clarify Your Vision

It doesn't say, "Let us give them a chance." It assumes a diverse work force that includes them and us. It says, "Let's create an environment where everyone will do their best work."

3. Expand Your Focus

Managers usually see affirmative action and equal employment opportunity as centering on minorities and women; the diversity here includes race, gender, creed, and ethnicity but also age, background, education, function, and personality differences. The objective not to assimilate minorities and women into dominant white male culture but to create a dominant heterogeneous culture.

4. Audit Your Corporate Culture

If the goal not to assimilate diversity into the dominant culture but rather to build a culture that can digest unassimilated diversity, then you had better start by figuring out what your present culture looks like.

5. Modify Your Assumptions.

The real problem with this corporate culture tree is that every time you go to make changes in the roots, you run into terrible opposition. Every culture, including corporate culture, has root guards that turn out in force every time you threaten a basic assumption.

6. Modify Your Systems.

The first purpose of examining and modifying assumptions is to modify systems. Promotion, mentoring, and sponsorship comprise one such system, and the unexamined cream-to-the-top assumption

7. Help Your People Pioneer

Learning to manage diversity is a change process, and the managers involved are change agents. There is no single tried and tested "solution" to diversity and no fixed right way to manage it. Assuming the existence of a single or even a dominant barrier undervalues the importance of all the other barriers that face any company, including, potentially, prejudice, personality, community dynamics, culture, and the ups and downs of business itself. Maybe they needed some kind of pioneer training.

9. Continue Affirmative Action.

The reason you then want to move beyond affirmative action to managing diversity is because affirmative action fails to deal with the root causes of prejudice and inequality and does little to develop the full potential of every man and woman in the company. In a country seeking competitive advantage in a global economy, the goal of managing diversity is to develop our capacity to accept, incorporate, and empower the diverse human talents of the most diverse nation on earth. It's our reality. We need to make it our strength.

Final Thought

For whichever of these reasons that motivates them, it is clear that companies that diversify their workforces will have a distinct competitive advantage over those that don't. Further, it is clear that the greatest benefits of workforce diversity will be experienced, not by the companies that have learned to employ people in spite of their differences, but by the companies that have learned to employ people because of them. In Short management philosophies and practices are culturally conditioned; it stands to the reason that there is much to be gained by including cultural studies in all management or professional development.


* Wederspahn M Gary (2002) "Do Your Employees Need Intercultural Services", HRM Review

* Dr. Sengupta Nilanjan & Chaudhari Ray Manodip (2002) "Managing Multiculturalism and Diversity In Organisations",HRM Review

* Singh K Manjeesh and Dutta Andrew (2003) "Understanding and Managing Workforce Diversity", HRM Review

* Sireesha (2003) "Gender In The context of Workforce Diversity", HRM Review

* Hofstede, G (1983). The Cultural Relativity of Organisational Practices and Theories. Journal Of international Business Studies.

* Hofstede G, 1980 Culture's Consequenses : International Differences In Work Rel;ated Values . London Beverely Hills: Sage.

* Chakraborty , S.K. (1991) Management By Values: Towards Cultural Consequences . Delhi, Oxford University presses.

Ms. Neetu Munjal
Ms. Madhvi Sharma
Kedarnath Aggarwal Institute of Management
Charkhi Dadri (Bhiwani)

Source: E-mail May 14, 2010


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