What is the biggest benefit that cultural diversity brings to an organization - Research Paper Example

? What is the biggest benefit that cultural diversity brings to an organization? Cultural diversity in organizations is highly beneficial especially in the current market world where many businesses operate on global levels. Culturally diversified organizations gain additional profits compared to organizations that only have workers from a particular cultural group. This is because the organizations focus on employees’ performances and skills instead of their backgrounds. Diversity increases organizations’ productivity because it promotes creativity at the workplace. Creativity is vital in the modern world because it helps in increasing organizations’ competitiveness and outputs. Diversified organizations get more sales because they attract a significant proportion of consumers. This is because many consumers prefer being served by people from the same backgrounds since they believe that such workers understand their needs. Additionally, diversified organizations attract more people because diversifying workforces creates a reputable firm. What is the biggest benefit that cultural diversity brings to an organization? Diversity entails valuing people from different cultural backgrounds. It involves inclusion of individuals from minority groups regardless of their gender or ethnicity. Workforces consist of individuals from different cultures within several workplace settings because of the higher rate of global migration recently. It is important for organizations to know the effects of diversity on various aspects of the business. Managers find it difficult to manage employees from different cultural backgrounds based on the varied challenges that make the process difficult. Many businesses are operating on global level in the current market world. This makes diversity vital because such businesses need to serve customers from different cultural backgrounds. One of the biggest benefits that cultural diversity brings in an organization includes increasing profitability. This is one of the major goals of many organizations. Cultural diversity increases profitability by promoting creativity Promoting cultural diversity in the work places encourages creativity especially during problem solving. This is because diversity favors the flow of new ideas and concepts in the wok environment. People from different cultural backgrounds have different experiences and ideas that help organizations to improve their operations. The combination of new ideas from different groups also triggers new thoughts. Different groups with different ideas also promote technological creativity. In the contemporary business world, the technological innovation in organizations enhances their competitiveness. Technological advances results from a combination of things that different workers do. Workers’ cultural backgrounds usually affect their ways of thinking and acquisition of knowledge. Employees may have the same education or occupation though varied cultures make them to have different outlooks and productivity. For instance, Indians have different business experiences and knowledge from Latinos. As these two groups come together, there are higher chances that their interaction will trigger new ideas. This may not happen when the business environment consists of only Indians (Gefen, Rose &Warkentin, 2011). The current United States is diversified because it has many immigrants from different countries. This has contributed to massive flow of knowledge that has in turn made the country standout especially through innovations. Such innovativeness helps in increasing organizations’ productivity that in turn increases their profitability. In the present market world, ideas are given more value compared to physical assets. As a result, most organizations are currently viewing employees as the major sources of innovation. Skilled foreign workers usually create spillover benefits on the employees from the host country. This is evident not only in the business world but also in professional sports (Gilbert & Ivancevich, 2009) Cultural diversity in an organization also helps in enhancing competitiveness in the market. This is because it enhances the chances of producing new things with economic value. This is vital because it helps in making an organization a dominant participant in the market. Innovation adds value to organizations because it makes them better than their rivals in the market. It is worth stating that diversity promotes creativity because it promotes effective learning. People usually value their beliefs and knowledge making them work hard to prove to the effectiveness of their beliefs. In the event that they feel that people with different beliefs are challenging their knowledge sets, they usually try to be more creative in order to prove them wrong. This in turn increases the workers’ performances and profitability of the organization (LaVeist, Relosa & Lantum, 2008). Research outcomes prove that organizations that are highly diversified get higher profits compared to those with lower diversity (LaVeist, Relosa & Lantum, 2008). This is evident in the rate of expansion of businesses in relation to their level of cultural diversity. Most of the worlds largest businesses are diversified making them grow at a higher rate because they get high profits. Globalization exposes all businesses in the world to competition from different sectors across society. Most businesses become successful because of their ability to detect competition faster and react appropriately. People from many different cultural backgrounds increase the chances of detecting competition faster. This happens especially if the organization has workers coming from their competitors’ countries. Additionally, they increase the businesses’ abilities to react to competition through their innovative ideas. This means that diversity helps in making an organization more powerful by increasing its flexibility. Competition usually helps businesses to look for new ways of increasing and improving their productivity that in turn increases profitability (Holden, 2001). Cultural diversity increases organizations’ recognition and sales Cultural diversity makes the business popular and recognized by many people in the society. Study outcomes show that many consumers prefer cultural diversified organizations. The major goal of businesses is to increase their profits by selling more goods and services. Higher sales can only be obtained if the business attracts many customers regardless of their different cultural backgrounds. Customers are among the most important stakeholders in organizations making it important for businesses to have workers from various backgrounds in order to serve the consumers effectively. Consumers usually like associating with highly diversified organizations. Most of the well performing businesses are usually ranked based on their level of cultural diversity. For instance, currently most firms are employing workers from different cultural groups in order be to be ranked in the Fortune 500 companies (Day, 2007). Culturally diversified organizations usually attract customers from different communities because they have managed to build a good reputation (Peltokorpi, 2006). This helps in increasing the profitability and sales of organizations. However, if an organization only employs workers from specific cultural groups, there are chances that the organization will have very few customers. This is because the organization will only attract people from the same cultural groups as those of employees. For instance, if an organization only employs males, it will mostly attract male customers and discourage many female customers from using the organization’s services. Additionally, if an organization only employs people from a specific race, it will discourage people from different races from buying products from the organization. Organizations with workers from specific groups are usually not very popular because people think that owners encourage discrimination (Peltokorpi, 2006). Many consumers become loyal to organizations that have employees whom they identify with. In the event that an organization has employees from many cultural groups, it increases its chances of attracting many customers from many backgrounds. This especially occurs in global organizations. Global organizations usually operate in different countries with diverse cultural practices and beliefs. Such organizations should employ workers with similar cultural backgrounds as consumers in the countries. This helps in preventing many problems that lower the business sales. For instance, it helps in reducing language barriers. Employees need to communicate with customers effectively in order to convince them that the organization offers the best products and services. However, if employees and customers cannot understand each other because of their different languages, the customers may switch to other organizations. This will lower the profitability of the organization because it lowers sales. In order to prevent such problems, an organization needs to conduct research on the cultural composition of its customers so that it employs workers that have the same cultural composition as the consumers. Organizations that deal with both male and female products have to employ workers from both genders. This is because most females prefer being served by female employees when they are buying female products. If the organizations only employ male workers, they will lose most of their female customers to other organizations (Yasin, Alavi & Zimmerer, 2002). Customers believe that employees from a similar background as them understand their needs better than those from different backgrounds. Matching the organization culture with customers’ needs is very helpful in increasing the customers’ satisfaction. This implies that promoting a diversified culture in the work environment helps in increasing the customers’ contentment. This contributes towards increasing the customers’ loyalty to an organization that in turn increases its profitability and value. Promoting diversity is an effective marketing strategy in the contemporary global economy. Organizations have to offer services and goods that positively influence the buying powers. ‘Smart” companies have achieved this by hiring workers from dissimilar backgrounds who offer services that appeal to the diverse customers. This especially works for organizations whose workers interact directly with customers. Highly diversified organizations usually have an advantage of understanding the bases of their customers. For instance, employees from different age groups may understand the spending habits and tastes of customers from many age groups. This makes the mixed-cultured organizations to have an opportunity to reach and expand markets that have not been tapped by their rivals. For instance, in the current United States, consumers are constantly changing because of the increase of the number of minority groups. In order to offer better services to the minority groups, organizations have to hire workers from such groups because they understand their needs better (Oregon, 2001). Apart from attracting many customers, diversity increases profitability by attracting many investors from different backgrounds. This is because diversity helps in establishing faith with different investors. Many investors trust culturally diversified organizations. It is worth acknowledging that a significant number of investors in a company enhance its growth because of increased profits. Foreign investors look for organizations that consist of people from many backgrounds because they believe they fit well in such organizations since they also come from foreign countries that have different cultures. Investors also judge organizations by their ethical and environmental responsibilities. Organizations with good reputations are always the best investment choices. For instance, the US population is currently aging making several organizations experience employees’ shortages. Organizations have to promote diversity by employing people from different age groups in order address this issue effectively. As it performs such a practice, the organization portrays two important messages to investors. The first one is that it makes investors believe that the organization can react effectively to modern challenges of ageing population that is likely to affect the productivity of most companies in future. Secondly, it makes investors to be aware that the company acknowledges discrimination as a form of injustice, making it unattractive to business practices (Syed & Murray, 2008). Workforce diversity also increases profitability because it helps in making an organization acquire a good reputation. Apart from increasing the organizations’ profitability, diversity also increases opportunities for employees. Organizations are widely recognized if only their reputations are good. This can be achieved if the organizations demonstrate their commitment to creating a culturally diversified environment. This is because diversity is considered a socially acceptable business practice especially in culturally diversified society. Customers usually refer organizations with socially acceptable practices. Through diversity, workers get many opportunities such as acquiring multicultural business skills. In addition, diverse work places usually open doors for promotions to employees who speak different languages and have multicultural understandings since globalization requires such workers (Hutchings, 2003). Cultural diversity increase profitability by lowering expenses The success of organizations depends on their abilities to reduce expenses and maximizing profits. It is pointless for organizations to focus on increasing profits without considering their expenses. Some of the expenses include recruiting expenses and legal charges. Most of the expenses can be reduced by creating a diversity culture in the work places (Elmuti, 2006). Apart from attracting customers, cultural diversity in work places is a legal requirement. Unlike the past society, most countries currently support equal opportunities for all members of the society through various laws. Study outcomes show that cultural diversified organizations pay less legal charges resulting from discrimination. Most organizations experiences huge losses for hiring workers with specific cultural backgrounds and denying others employment opportunities due to their different backgrounds. Such legal fines usually lower organizations’ values and profitability. Most countries try to eliminate any form of discrimination by implementing workplace diversity policies. Diversity policies prohibit many practices such as discriminative hiring. Some employees usually hire workers from the same cultural backgrounds as theirs. They leave out workers worker with more qualifications because of their selfish interests. The aim of such employers is to make only the people they identify with to benefit. Such employers usually pay huge legal fines once the discriminated applicants file suit against them. The highest number of workplace discrimination cases in the United States in race-related. Most organizations prefer employing white applicants leaving many minorities jobless. Employers also pay huge penalties for treating their employees differently in the work places because of their differences (Lewis, French, & Phetmany, 2000). For instance, employers are not allowed to promote only workers from a particular group or allocate jobs based on the workers cultural backgrounds. Additionally, organizations face severe charges for failing to implement measures that prevent discrimination in the work places. Employers need to consider the Equality Act at every stage of their relationship with employees beginning from hiring to promotion. Some employers found guilty of discrimination have paid fines that exceed 1 million dollars just for one case. If a company engages in several discrimination acts, it will end up parting with millions of dollars. This money can be used in expanding a business or in investing in other ventures that can benefit an organization. The profitability of a less diversified company cannot be compared with that of the same company that avoids such charges. In order to avoid paying such huge penalties, employers should focus on creating a culturally diversified work place (Yasin, Alavi & Zimmerer, 2002). Apart from paying huge fines, companies that do not value diversity usually lose contracts with the government agencies. In order to make the Equality law effective, the government usually sets an example by promoting diversity in its agencies. The government should also have contracts with organizations that value diversity. If the government is aware that employers who have signed contacts with its agencies engage in any discriminative acts, it usually terminates the contracts immediately. This is because failure to do this may make the public to view the government agencies as corrupt too. Signing contacts with the government agencies is a good opportunity for a business to increase its profitability. This is because government agencies usually buy products in large quantities from a business. Furthermore, the contracts with the agencies give an organization more opportunities to expand its market share and generate more profits. If an organization does not value diversity, it will lose opportunities to get such large profits and market shares once the government agencies terminate the contract (Davison & Burke, 2000). Cultural diversity increases profits by lowering the turnover rates Lower turnover rates in organizations indicate that such entities have attractive work environments. Organizations that promote cultural diversity usually create attractive work places. However, if an organization does not value diversity, it will experience a high turnover rate. This is because it will promote a culture where workers from the minority groups are isolated. This creates a hostile work environment that forces employee to quit working for the organization. Lower turnover increase the organization profitability because it means that all workers are working fulltime. However, high turnover rates lower profitability because it reduces productivity. If many workers resign from an organization, it means that the organization will have fewer workers who will be less productive. This is because the remaining workers will not perform similar work as before. It will also mean that the remaining workers will be overworked. This will make more workers to quit and the organization will continue to have lower productivity. Additionally, high turnover rate reduces an organization’s profitability by increasing it expenses. Organizations spend a lot of money time hiring new workers due to high turnover rates (Devine, Baum, Hearns, & Devine, 2007). This is because they have to spend more money training new workers to perform organization tasks. In addition, it takes a lot of time for new workers to produce the same outputs as old workers. Even if they only perform poorly during their initial periods in the organization, they will still have to be paid. However, if an organization promoted diversity, workers from the minority groups will feel valued in the organizations. Additionally, they will not be isolated from the rest of the team members. In the society, individuals with certain cultural backgrounds believe that they have better business experiences compared to other groups. Such employees do not understand the value of cultural diversity. These employees make other workers especially the minority groups to feel undervalued. Even if the mangers of the organization recognize the efforts of the minority groups in the work place, their performance will be negatively affected. This is because the negative comments of the majority members affect their attitudes towards their performances negatively. This contributes to the increased turnover rates. Appreciating diversity helps in creating a friendly work environment that encourages cooperation regardless of the differences of the team members. Diversified organizations usually retain their workers because they do not find reasons to quit work. Such organizations usually experience high productivity because they do not waste time and money hiring new people. Workers are motivated to work harder because they feel worthy (Oya, 2006). Diversified organizations retain most of its workers because it gives them equal opportunities to grow. For instance, they grow by learning new things after interacting with people having different business experiences. Such organizations usually give equal promotions opportunities to all workers based on their merits and not their cultural backgrounds. This increases the workers loyalty to the organizations because they are sure that they will get promotions once they perform well. This motivates them to improve their performances in the work place. It also leads to the improved productivity of the overall organization (Greenwood, Tworoger, & Golden, 2009). Promoting cultural diversity enables employees to respect each other. Respect can be achieved if organizations set strict discrimination policies and create awareness through trainings on the importance of diversity in the work place. Internal disputes can hinder organizations from increasing its profitability because it wastes more time on settling disputes. In addition, internal disputes hinder teamwork that increases production and creativity. This is because dispute creates hatred among workers that in turn makes it difficult for workers to communicate or share ideas. In addition, internal disputes create a hostile environments and poor relationship between employees. This lowers the organizations’ productivity because it encourages absenteeism and increases turnover. However, in organizations that promote diversity, employees are aware that they need each other and good relationships will increase their support for one another. Organizations should reduce conflicts by ensuring that employees engage in team-build activities and interpersonal communication. This enables employees to accommodate one another. Study outcomes prove that acknowledging cultural diversity in the workplace helps in changing the behaviors of organizations positively. This is because the nature of workers’ interactions and the level of cultural diversity usually affect the patterns of employees’ behaviors in an organization. In order to improve the workers’ performances, organizations should create favorable behavioral patterns. Additionally, they should ensure that the highly diversified workers interact well. Apart from improving the performance of employees, positive behaviors help in creating a good image for the organization that in turn attracts more customers (Kazi & Zadeh, 2011). Diversity increases profitability by lower absenteeism Diversity lowers absenteeism in work places because it helps create a good relationship between employees. It also builds a good relationship between workers and managers. Poor relationship among employees themselves and between them and the managers creates a hostile environment that increases stress. This discourages employees from going to work every day. Poor relationships at the work places results from lack of cultural diversity in organizations. Lack of diversity makes workers and managers from the majority group detest persons from minority groups. It hinders them from appreciated different cultures in the society. Additionally, such environments encourage workers to speak their ethnic languages in the work places. This makes minority workers not to have a sense of belonging in the organizations. This leads to high absenteeism that lowers the outputs of the organization. Absenteeism also increases the organizations expenses because organizations still pay some workers who have lower performances. In culturally diversified organizations, workers are usually encouraged to interact with one another and isolation of people from the minority groups is usually prohibited. In such organizations, all workers regardless of their different cultural backgrounds usually receive equal chances to participate in decision-making processes. Such involvement motivates workers to work harder and creates a happier group of workers. This makes them to look forward to going to work the next day (Marcoux & Ouedraogo, 2012). Diversity increases profitability by encouraging teamwork Organizations that value diversity believe that employees have the same abilities to perform tasks irrespective of their different cultural backgrounds. Such organizations recognize that diversity encourages innovation. As such, if different employees work together, they usually increase a company’s productivity. Teamwork increases the profitability of organizations because it increases the efficiency of employees. People who work in teams usually complete complex tasks within the shortest time compared to people who perform the same tasks individually. This allows organizations to complete more work and make more profits without increasing the number of workers. Discouraging teamwork forces organizations to increase the number of their employees, leading to higher expenses. Diversity encourages workers to support each other in their teams. In every organization, all workers experience challenges at some point. However, with workplace diversity, workers usually come together to help one another improve their performances. Teamwork is also important because it makes employees to understand each other’s strengths and weakness. This makes them realize the values of each other’s beliefs and culture (Stahl, Maznevski, Voigt & Jonsen, 2010). Culturally diversity helps in attracting highly skilled employees Organizations’ profitability depends of the workers ability to produce quality goods and services. This usually depends on their levels of skills. Organizations that employ people from different cultural backgrounds usually have large pool applicants to recruit. This increases the chances of employing people with the most appropriate skills. In addition, diversity creates a happy and friendly work environment making it attract many qualified workers from many cultural backgrounds. Highly skilled workers increase the organizations productivity and creativity. However, organizations that only employ individuals from one or very few groups of people due to discrimination reduce their chances of getting qualified employees. People from favored cultural groups may not have better skills compared to those discriminated against. Organizations’ profitability requires skills and knowledge, but not culture. This makes it vital for organizations to focus on the applicants’ abilities to perform tasks as per the organizations expectations instead of their cultural backgrounds (Marcoux & Ouedraogo, 2012). Conclusion The current society is more culturally diversified compared to the past. Organizations have to ensure that their workforces are culturally diversified too. The major benefit that organizations can enjoy from diversity encompasses the increase in profitability. Diversity increases profitability in various ways. For instance, it increases productivity because it promotes creativity and innovation at the work place. This is because people from different backgrounds have varied business ideas that help in improving productivity. In addition, when different people come together, they always make each other think differently. This triggers new ideas that help in improving their performances. Diversity increases profitability by reducing expenses and improving the reputation of an organization. Most companies that do not value diversity usually incur more expenses such as legal fines because they are more likely to discriminate against employees. Additionally, such organizations usually have high turnover rate because their work environment is usually too hostile for minority groups. This forces many workers to quit work. The organizations will have to incur more expenses in the regular hiring processes and training new workers. Such expenses reduce the net profits of organizations. A diversified workforce knows and meets the needs of the culturally diversified consumers appropriately. This helps in increasing the customers’ satisfaction that in turn increases the organization revenues. References Davison, K.H. and Burke, M.J. (2000). Sex discrimination in simulated selection contexts: a meta-analytic study. Journal of Vocational Behavior, 56, pp. 225-48. 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