The Impact of Cultural Diversity on Organizational Management in the United States

The U.S. is continuously becoming a diverse nation that is characterized by multi-lingual and ethnic groups such as Whites, Black or African-American, Hispanics, America Indian, Alaska Native and some other races that require companies both local and multinational to take into account different backgrounds and experiences of the workforce (Patrick and Kumar, 2012). Over the past two decades, the integration of positive attitudes into business organizations has sufficiently received significant and fair attention (Martin, 2014). Proper strategic planning of the organizational culture by the leaders has a significant impact on diversity in the workplace (Neault and Mondair, 2011). The changes in demographics through international trade, globalization of the economies and emergence of globally diverse teams have led to intercultural interactions that affect the performance of U.S. companies particularly on how management lead from social-cultural backgrounds (Ayega and Muathe, 2018). Despite the decline in national economic barriers the country experiences a broad range of multicultural issues that affect the operations of daily activities of both local and international countries in the U.S (Udin, Suharnomo, Wahyudi and Wikaningrum, 2017). Hence, the research context is based on how organizational management can embrace multicultural interpretation and understanding among employees to enable them to remain motivated, committed and productive.

Research Topic

The aim of the study is investigating the effects of cultural diversity on US companies’ organizational management.

Specific objectives

To find out how cultural diversity affects organizational management in the US companies.

To identify the role of cultural diversity in enhancing business success among US companies.

To make recommendations on managing cultural diversity in organizations.

The research aims at answering the following three questions;

1. How does cultural diversity affect organizational management in the US companies?

2. What are the roles of cultural diversity in enhancing business success among US companies?

3. What are some of the recommendations that firms can use to manage workplace cultural diversity in a better way?

Promoting diverse cultures within a business enterprise allows managers to gather various skills and perceptions and offer a competitive advantage (Simons and Rowland, 2011). Another specific objective includes identification of how effective management of diverse cultures can yield success in an organizational context. Therefore, a diversity strategy should be focused and success if the management seeks to establish a working environment that nurtures participation, cohesiveness and teamwork which eventually have a positive impact on performance (Armenakis et al., 2011). After a thorough review of literature and research gaps in the external and internal environment in which U.S. companies operate, the project will meet an objective of making appropriate recommendations to overcome multicultural issues.

Research Environment and Demographics

Different Fortune 500 companies are promoting inclusion and diversity among the workforce through the provision of equal employment opportunities to people from diverse backgrounds (Udin et al., 2017). Diverse companies have been recording a cash flow of over 2.3 times that do not embrace cultural diversity. Furthermore, their returns are over 35% above the national industry medians (Kuabara and Takahashi, 2017). There is transparency on workforce demographics as minorities, women, people with disabilities and non- Americans argue that the management focuses on enhancing equal representation, feeling of inclusion, increased morale and non-favoritism (Shaban, 2016). Significant efforts have been made to leverage the demographic shift but researchers in the field have proved them to be insufficient and inconsistent. However, there is still discrimination against the ethnic minorities in several organizations (Saxena, 2014).A focus on hiring diverse talent is not sufficient, because engagement and mobilization of the management will depend on the ability to build strong relationships among members from different cultural backgrounds across the states (Ferdman and Sagiv, 2012).Therefore, a full-scale strategy and a new business model is necessary to foster full preparation of an organizational management to leverage rapid growth and unseen opportunities of the diverse workforce and diverse consumer. Approximately 80% of organizations in the technology sector argue that having a diverse culture lead to high stock prices, lower litigation expenses, more satisfied workforce, better understanding and service of customers, higher creativity in decision making, and enhanced productivity and performance (Kuabara and Takahashi, 2017). The companies hire individuals with diverse talents regardless of ethnicity, race and gender, which ensures’ that every individual is motivated, committed, creative and innovative. The government has introduced a variety of discrimination laws but a smaller percentage of below 50% of corporations have made significant efforts to implement them (Martin, 2014). Organizations such as Johnson & Johnson, Coca-Cola and Marriot International that embrace cultural diversity in the workplace, have been performing better due to effective management that focuses on ensuring that their companies grow significantly in today’s fiercely competitive global marketplace(Ayega and Muathe, 2018).

Academic and Practical Relevance

Therefore, the situation demands that all companies in the United States of America to rethink their communication strategy both internally and externally, their operational and functional activities in the departmental area and how leadership can embrace workplace cultural diversity to promote growth, innovation and opportunity. Strategic implications should, therefore, be based on the unwavering commitment to cultural diversity that allows leaders to promote a full sense of belonging and innovative team building(Neault and Mondair, 2011).Cultural diversity is a significant source of strength for managers and leaders as employees from distinct social backgrounds can bring cognitive outcomes, creativity and increased performance.In the academic research, cultural diversity in management has received little attention, despite the growing interest in the professional world, especially where companies employ workers from diverse ethnic backgrounds (Armenakis, Brown and Metha, 2011). Nonetheless, the intelligence of the demographic shift is an important component to allow organizational management to continuously adapt to the changing marketplace and their unique and growing needs (Patrick, 2010). Inclusion and diversity are important to management and academics as the two components are important to avoid discrimination against cultural differences such as religion, gender, age and ability. The research will, therefore, provide information that will add up to the existing knowledge regarding cultural diversity among managers in the working environment.

Critical Literature Review

Due to increased globalization and competition Ayega and Muathe (2018) argues that many organizations have shifted their focus on maintaining a culturally diverse workforce to fit into the heterogeneous and industrialized population and enhance workplace collaboration and participative decision making. A study by Olsen and Martins (2012) indicate that the process of cultivating success and future growth in the dynamic labor market will require firms to enhance workforce diversity management. The success of corporations in the U.S. depends on the ability to promote social gatherings and team building activities that allow interactions among employees and reduction of isolation and discrimination (Armenakis, Brown and Metha, 2011). However, according to the findings by Ferdman and Sagiv (2012), globalization has led to the free movement of labor across borders and the human rights organizations are also at the forefront to ensure that the minority groups are not excluded from any form of employment. Whilst the process of managing a diverse workforce compels a reduction of cloning that prevents equality in selection and promotion, Chen, Liu and Portnoy (2012) recommend that a broad range of ideas should be considered that include fostering innovation and competitive performance to enrich the firm’s human capital. According to Gupta (2013), the economies are continuously shifting from manufacturing to service economies that require effective communications and interactions and thus, the need to deal with multi-cultural issues that impact the success of businesses. Despite the increased attempts to determine how managers should foster diversity among teams to enhance higher creativity, better distribution of economic opportunity, improved decision-making, significant competitive advantage and greater success in marketing, the researchers do not provide sufficient knowledge on how cultural diversity can be incorporated into corporate values to enhance collaboration and business success.

Even though expression of diverse ideas and beliefs can yield better decision-making and creativity, Ayega and Muathe (2018) suggest that incorporating an integration strategy can encourage managers and their teams to retain cultural identities but at the same time maintain cohesion and collaboration. The work environment needs to be characterized by diverse people who are motivated, satisfied and committed through performance feedback discussions that encourage positive behaviors and discourage negative attitudes which affect the standards (Woods, Baker and Hibbins, 2011). The contemporary society requires business organizations to implement interventions that foster cultural diversity and the initiatives should primarily aim at developing employees to their full potential and eliminating communication barriers (Saxena, 2014). Availability of better and talented employees can promote work and cost relationship as well as enhancing sustainable business advantage. As concluded by Chen, Liu and Portnoy (2012), an organizational approach towards diversity should consider three different perspectives that include integration and learning, discrimination and justice and lastly, access and legitimacy paradigm. The researchers agree that consistent and ongoing leadership is therefore essential in ensuring that the diversity interventions are adopted and they promote the business strategy of a particular organization. Although, some of the results show that future research should focus on determining how diverse teamwork can perform better and contribute significantly to fostering organizational effectiveness and job satisfaction among minority groups in the workplace if cultural diversity is promoted among the management of different organizations.

Nevertheless, policymakers and scholars have embarked on initiatives for acknowledging, accepting and valuing cultural differences among ethnic groups in the globally competitive environment (Martin-Alcazar, Romero-Ferandez and Sanchez-Gardey, 2012). As a result, the challenges and opportunities being experienced in the organizational set-up will require management to craft concepts and application techniques to increase a diverse culture. Handling multiculturalism is a complex task and requires a quest for social justice, ethical and social responsibilities towards minority groups, and the elimination of gender and racial discrimination (Mazur, 2010). A study conducted by Saxena (2014) indicates that workers from varying ethnic backgrounds can share experiences, skills, knowledge and talent provided that leaders reserve intercultural communication together with embracing diversity practices across all the departmental levels. Therefore, process of managing cultural diversity can be compromising and applying a synergetic, ethnocentric and parochial approach may be useful in solving differences or conflicts that can arise in the workplace as a result of cultural misunderstandings (Udin, Suharnomo, Wahyudi and Wikaningrum, 2017). Stevens and Ogunji (2011) conducted a study to investigate the impact of multicultural teaching among students and its implication in the workforce and concluded that relative to homogeneous groups, culturally diverse teams are more effective in job performance and interaction process and empowers creativity along with promoting representation of all people in operational and functional activities. On the contrary, managers make significant efforts to promote culturally diverse workforce in the workplace, there is a need to focus on the six phases of diversification that encompass valuing, denial, appreciation, acceptance, recognition, valuing and utilization (Woods, Baker and Hibbins, 2011). These findings from the review of the literature regarding diverse culture and organizational management indicate that the provision of equal employment opportunities and adherence to human rights legislation allows an organization to run its activities smoothly and the top management should provide full support in enhancing diversity among people from varying cultural backgrounds.

When diversity and inclusion are promoted within an organization, there will be recognition of enhanced productivity, employee engagement, creativity and profits as well as improved company reputation and reduction of staff turnover rates (Patrick and Kumar, 2012). A diverse leadership team promotes a sustainable future and as explained by Ferdman and Sagiv (2012), people should accept and respect their differences to overcome organizational conflicts and focus on achieving common strategic goals and objectives. Additionally, during the delivery of a company’s goals and targets, leaders and managers should seek employees’ views through focus groups and surveys, gather hard data on representation and demographics and lastly foster cultural diversity benchmarking against rivals in the same industry (Kuabara and Takahashi, 2017). On the contrary, Martin-Alcazar et al., (2012) propose that a catalyzing action will entirely require increased transparency and strategies that promote inclusivity and avoidance of cultural differences. Multiple personalities, voices and perspectives offer a platform for exchange of ideas openly, breed creativity and meet consumer needs and expectations especially in the emerging markets (Ferdman and Sagiv, 2012). Whilst the primary dimensions of cultural diversity include race, religion, nationality, capability and gender, secondary attributes encompass experience, education level, interests, status, values and beliefs (Gupta, 2013). Additionally, according to Shaban (2016), a diverse culture can be viewed from the perspective of organizational characteristics that include values, position, employment status, job roles and lastly, behavior.

The myriad cultural variations require individuals to communicate with, understand and interact appropriately with colleagues from varying cultural beliefs and values (Udin et al., 2017). Cultural differences result from tenure, function, gender and race-ethnicity among the organizational elements which eventually lead to conflict among team members. Given that disrupted communication results in negative outcomes, Stevens and Ogunji (2011) argue that managers of a particular organization should, therefore, implement strategies that help in dealing with challenging issues associated with workplace diversity. According to Chen, Liu and Portnoy (2012, multicultural differences can be handled through four main methods that include structural intervention, managerial intervention, adaptation and exit. However, from the findings of Mazur (2010), communication and creation of awareness is a useful strategy that can facilitate encouragement, appreciation and support among employees who focus on the capitalization strategies. Empowerment and participation in decision making have been used as the appropriate techniques to promote an environment of diversity (Simons and Rowland, 2011). Nonetheless, the studies have failed to explain how training programs can allow leaders and managers to promote diversity among team members in the workplace. Additionally, co-existence of employees from various social-cultural backgrounds can lead to a rapid growth of the base of minority consumers (Kuabara and Takahashi, 2017). There is still little research regarding how effective communication and evaluation programs can foster sharing of information.

Summary

As identified in the literature, the effects of cultural diversity depend on how organizational leaders manage it through proper strategic planning. In the coming years, cultural diversity will increase significantly and many organizations are making efforts to create suitable social and work environments whereby employees. In the workplace, cultural diversity is recognized as a serious issue that compels high attention (Shaban, 2016). The existing research has focused on general overviews of diversity and failed to demonstrate the impact of social-cultural factors on companies that operate in diversified nations such as the U.S.(Ayega and Muathe, 2018). Therefore, this research will address cultural diversity and organizational management with a primary focus on U.S. companies. The rationale for addressing the gap includes exploring extensively the diversity management practices by focusing on active occurrence in the workplace, organizational benefits and extent to which business enterprises in the U.S. are committed to the provision of an encouraging environment that supports respect of equity beyond legislative compliance.

Hypothesis

i. Cultural diversity has a positive impact on U.S. companies’ organizational management.

ii. The business success of organizations is based on the ability of the management to handle cultural diversity effectively.

iii. Business enterprises are making cultural diversity an intrinsic part of corporate’s value system.

Research Design and Methods

Research Design

Due to the nature of the ensuing study, a qualitative design will be employed to develop appropriate findings. The method allows systematic enquiry into social phenomena, which may include but not limited to how enterprises function, individuals experiences, and impacts of employees interactions on performance (Easterby-Smith, Thorpen and Jackson, 2012). Crucially, qualitative research is an examination that seeks answers to problems, collects evidence, and gives results that were not determined in advance. Since the current research aims at understanding effects of cultural diversity on organizational management in the US companies, the use of this approach will provide the opportunity to find appropriate answers to the problem (Easterby-Smith et al., 2012). The main strength associated with qualitative design includes the ability to give a complex textual description of the issue, which will, in turn, enhance the identification of intangible factors including social norms whose role may not be apparent. The approach helps in generating results that are subjective, which allows the researcher to make interpretation depending on the study problem (Bryman and Bell, 2015).

The element of positivism will constitute the epistemological stance to ensure factual knowledge is achieved through observation or interviews. Positivism will enhance objectivity and induction crucial for credible and accurate results. Besides, the qualitative design is preferred for this study because it aids in getting a broader perspective on the subject. For instance, the approach will allow the researcher to use factional information from the literature review and primary data to develop an accurate result (Bryman and Bell, 2015). Other strengths includes the ability to allow subject materials to be evaluated with greater detail, provides industry-specific insights, small sample sizes which will save cost, and allowing collection of data with predictive quality(Teherani, Martimianakis, Stenfors-Hayes, Wadhwa and Varpio, 2015). Nevertheless, qualitative design is associated with various demerits such time-consuming in mining data, researchers influence may have a negative effects on the gathered information, and data that is highly subjective. These issues will be addressed by adhering to ethical imperatives and eliminating all cases that may create biases, and hiring enumerators who have vast experience in data collection.

Operationalization

The hypothesis for the study is to ascertain if cultural diversity enhances businesses success, particularly those operating in the United States. Data collection process will focus on identifying how various dimensions of cultural diversity influences the performance of the business. As such, participants will be required to give their personal experience with cultural influence and measures put forth by management to maximize benefits associated with unique organizational culture.

Probability sampling will be used to ensure every person from the identified group has an equal chance of being selected. The first steps will include identifying appropriate sampling frame based on objectives and research questions, determining a suitable sample, and selecting a specific group to represent the entire population (Teherani et al., 2015). Stratified sampling will be used to classify people in different segments based on their roles in the organization. The primary target in the research includes employees and the management, where the focus will be on the human resource managers (HRM). HRM are preferred because of the central role they play in ensuring individuals who can easily adapt the organizational culture. Some of the potential benefits associated with the sampling approach entail the absence of biases, increased accuracy of estimation, and higher levels of reliability of research findings (Teherani et al., 2015). Stratified random sampling will ensure a high degree of representativeness of the target population. Moreover, recruitment of the participant will be based on their willingness to ensure employees who have profound knowledge about cultural diversity and how it impacts their performance are selected. The research will focus on companies in the same industry, where the retailers are preferred to enhance uniformity.

In regards to geographical setting, 5 retailers operating in the US market will be selected. Since the targeted retailers have different branches across the country, only one centre will be considered. Moreover, 2 human resource managers and 10 employees from every retailer will be subjected to interviews or filling of questionnaires respectively. In total, 10 HRM and 50 workers will be selected as they are believed to be an appropriate sample for the target population. However, it is anticipated that some managers may be unwilling to share their experience and knowledge due to busy work schedules organization policies that restrict disclosure of specific information. To address such challenges, enumerators will give a precise explanation of the importance of the research and measures that will be applied to maintain secrecy.

Ethical Consideration

Informed Consent: Consideration of this principle will ensure individuals voluntarily and willingly participate in the research without coercion (Steffen, 2016). To comply with this imperative, detailed information regarding potential benefits and challenges of the research will be provided to every participant to enhance understanding. These data will be supplemented verbally to ensure all the necessary information is availed in order to make informed decisions. Maintaining the element in the research will positively influence participants to share their experience, opinion, and knowledge concerning the study problem (Steffen, 2016). Research permission letters will be required from the target companies as well as human resource managers.

Respect for Anonymity and Confidentiality: Anonymity will be maintained by removing respondents’ names in order to protect their identity. The project results will not be linked with participants’ identities unless it is crucial to the study protocol (Kaiser, 2010). On the other side, confidentiality will entail ensuring the data collected from respondents is not accessed by anyone outside the research (Kaiser, 2010). Therefore, researchers will inform participants about all steps established to ensure their responses remain confidential. Some of the measures include setting strong passwords for computers and storing research instruments in a secure place which cannot be accessed by unauthorized parties.

Research Tools

Questionnaires: Both closed and open-ended questions will be printed on questionnaires, which will be administered to employees. Besides, they are most preferred for the research because they are cost effective and will save time. For instance, the target 10 workers in every organization will respond to questionnaires on the same day hence saving time.

Writing materials: Notebooks and pens will be used by enumerators to write important information during the interviews. These materials will be basically utilized in composing a summary of the research.

Audio and video equipment or Flash: The tool will be utilized for recording conversation with HRM. The collected information will be sorted using voice recognition and textual analysis software. Besides, the gathered data will be analyzed using a thematic approach to ensure specific objectives and research questions are adequately answered. A thematic method is valid because it will allow specific themes to be addressed regarding the effects of cultural diversity on management practices and organizational performance.

Data analysis methods

The primary data will be stored in a recorded and written forms, which will ultimately sorted before the analysis. All the conversations during the interview with HRM will be recorded using video equipment. Every session will last at least 30 minutes to ensure various aspects concerning the research problem are adequately addressed. Other issues relating to the study but not included in the questionnaires will be also discussed to ensure adequate data is gathered for analysis. Writing and recording of the information during the interviews are preferred because they will allow the researcher to make a summary as well as keep the entire conversation for review. For the sample of 60 participants, 2 enumerators will conduct the interviews from the 5 selected retailers. The first step will entail sending emails or communicating with human resource managers through mobile phones concerning the appropriate time to conduct the interviews. Importantly, employees in the respective companies will also be given questionnaires and shall be collected in the same date. Enumerators will be obligated to record the entire conversation during interviews, which will be sorted afterwards for interpretation. The data collection practice will be completed within a period of 3 months as this period is perceived to be appropriate for all the participants.

Thematic analysis will be applied to identify all patterned meaning across dataset and further provide accurate answers to the study problems being examined. Various steps used for the analysis of data are easy to follow and gives meaningful findings from the participant’s responses. For the interviews, the researcher will follow various steps such as familiarization, the generalization of the initial codes, creation and review of themes, naming and defining main results, and writing a final report (Braun and Clarke, 2013). Similarly, the process for sorting and analyzing questionnaires will entail becoming aware of the data, generating initial codes, searching and reviewing themes, and making a write up. Coding will be conducted depending on themes or study objectives. Since the study was concerned with addressing specific objectives o issues, a theoretic thematic analysis will be employed. Based on this premise, every segment of information relevant to the research question will be coded. In order to develop accurate results, the researcher will ensure identified themes are coherent and distinct from each other (Javadi and Zarea, 2016). Finally, the conclusion will offer a precise view on whether cultural diversity promotes organization management.

Validity and Reliability Issues Associated with the Analysis

Fundamentally, analyzing qualitative study is associated with various challenges, particularly for those who are inexperienced (Javadi and Zarea, 2016). The potential threats to this approach may include information and selection biases, which will be addressed by grouping all the data provided by subjects. There will be no prejudice during the analysis of data as all information will be accorded equal value. Biases associated with the selection will be solved through following the laid down procedures to ensure all activities are conducted depending on the established plan. Moreover, the element of flexibility may culminate in lack of coherence and inconsistency in developing themes that are derived from the study. To overcome these issues, the coding of the data will be strictly based on research questions.

References

Armenakis, A., Brown, S. & Metha, A., 2011. Organizational Culture: Assessment and

Transformation. Journal of Change Management ,11(3):305- 328.

Ayega, E.N. and Muathe, S., 2018. Critical Review of Literature on Cultural Diversity in the

Work Place and Organizational Performance: A Research Agenda. Journal of Human Resource Management,6 (1): 9-17.

Braun, V., and Clarke, V., 2013. Successful qualitative research: A practical guide for

beginners. Sage.

Bryman, A. and Bell, E., 2015. Business Research Methods. Oxford: Oxford University Press.

Chen, X., Liu, D. and Portnoy, R., 2012. A multilevel investigation of motivational cultural

intelligence, organizational diversity climate, and cultural issues: Evidence from US real estate firms. Journal of Applied Psychology, 97(1), pp.93-106.

Easterby-Smith, M., Thorpe, R., and Jackson, P., 2012. Management Research, 4th edition,

London: SAGE Publications.

Ferdman, B.M., & Sagiv, L., 2012. Diversity in organizations and cross-cultural work

psychology: What if they were more connected? Industrial and Organizational Psychology, 5:323- 345.

Gupta, R., 2013. Workforce Diversity and Organizational Performance. International Journal of

Business and Management Invention, 2(6):36-41.

Javadi, M. and Zarea, M. (2016). Understanding Thematic Analysis and its Pitfalls. Journal Of Client Care, 1 (1), 33-39.

Kaiser, K., 2010. Protecting Respondent Confidentiality in Qualitative Research. Qual Health

Res, 19(11): 1632–1641. doi: [10.1177/1049732309350879]

Kuabara, P. S. S. & Takahashi, A. R. W., 2017. Organizational learning, practices of diversity,

and ceremonialism: a study proposal in the multinationals context. Revista de Administração Mackenzie, 18(5), 169-201.

Martin, G.C., 2014. The Effects of Cultural Diversity In The Workplace. Journal of Diversity

Management, 9(2):89-92.

Martin-Alcazar, F., Romero-Ferandez, P.M., Sanchez-Gardey, G., 2012. Effects of Diversity on

Group decision-Making Processes: The Moderating Role of Human Resource Management. Springer Science Business Media, 21(5): 677-701.

Mazur, B., 2010. Cultural Diversity in Organisational Theory and Practice. Journal of

Intercultural Management, 2(20):5–15.

Neault, R., and Mondair, S., 2011. Supporting workplace diversity: Emerging role for

employment counselors. Journal of Employment Counseling, 48(2), 72–80.

Olsen, J. E., & Martins, L. L., 2012. Understanding organizational diversity management

programs: A theoretical framework and directions for future research. Journal of Organizational Behavior, 33(8), 1168-1187.

Patrick, H. A., & Kumar, V. R., 2012. Managing Workplace Diversity: Issues and

Challenges. SAGE Open. https://doi.org/10.1177/2158244012444615

Patrick, H. A., 2010. Organization culture and its impact on diversity openness in the

information technology organizational context. Dimensions, 1(1):67-72.

Saxena, A., 2014. Workforce Diversity: A Key to Improve Productiv