Cultural Diversity & Negotiations—A Global Perspective

By : Prof. Rajesh Asrani
Core Faculty Member,
N. R. Institute of Business Management, Ahmedabad, India
(P. G. Centre of Gujarat University for MBA)

Universal needs create strong pressure for a global strategy. Universal needs exist when the tastes and preferences of consumers in different countries with regard to a product are similar. Products that serve universal needs require little adoption across national markets; thus, global integration is facilitated. The role of culture plays an important role in this context.

In many ways, cultural issues represent the most elusive aspect of international business. In an era when modern transportation and communication technologies have created a “global village”, it is easy to forget how deep and enduring the differences among nations actually can be. The fact that people everywhere drink Coke, wear blue jeans, and drive Toyota doesn’t mean we are all becoming alike. Each country is unique for reasons rooted in history, culture, language, geography, social conditions, race and religion. These differences complicate any international activities, and represent the fundamental issues that inform and guide how an organization should conduct business across borders.

Managers who ignore culture put their organizations at a great disadvantage in the global marketplace. Because each culture has its own norms, customs, and expectations for behavior, success in an international organization depends on one’s ability to understand the cross-cultural issues especially those concerning the integration of diverse workforce.

DIVERSITY IN WORKFORCE

Workforce diversity has become an important issue abroad. The integration of this diverse workforce along many different dimensions has become very important. These dimensions of diversity might include gender, age, ethnic origin or any of several others. A group comprising five middle-aged white male U. S. executives has relatively little diversity. If one member is replaced by a young white female executive, the group becomes a bit more diverse. If another member is replaced by an older African American executive, diversity increases a bit more. And when a third member is replaced by a Japanese executive, the group becomes even more diverse.

DIMENSIONS OF DIVERSITY

• Age
  One important dimension of diversity in any organization is age distribution of workers. Birth rate and health and medical care are the factors contributing to this pattern.
  
  
• Gender
  As more and more women have entered the workforce, organizations have subsequently experienced changes in relative proportion of male and female employees. Many organizations today also face a major gender related problem called glass ceiling. The glass ceiling describes a barrier that keeps women from advancing to top management positions in many organizations. This ceiling is a real barrier that is difficult to break, but it is also so subtle as to be hard to see.
  
  
• Ethnicity
  A third major dimension of cultural diversity in organization is ethnicity. Ethnicity refers to ethnic composition of a group or organization. Issues of right and wrong get blurred as we move from one culture to another, and actions that may be normal and customary in one setting may be unethical- even illegal- in another. To safeguard against ethical problems, companies have established codes of conduct. The codes lay out precisely what kinds of actions are permissible, and provide procedure and support systems that organizations can use in ambiguous situations.
  
  
• Other dimensions
  In addition to age, gender and ethnicity, organizations are also confronting other dimensions of diversity. Country of national origin is a dimension of diversity that can be especially important for global organizations. This dimension can be particularly important when different languages are involved. Handicapped and physically challenging employees are increasingly important in many organizations. Single parents, dual career couples, gays and lesbians, people with special dietary preferences and people with different political ideologies and view points also present major dimensions of diversity in today’s organizations.

Geert Hofstede has identified four dimensions along which managers in international organizations tend to view cultural differences:

• Power distance: the extent to which a society accepts the fact that power in organizations is distributed unequally.
• Individualism/collectivism: the extent to which people act on their own or as a part of a group.
• Uncertainty avoidance: the extent to which people in a society feel threatened by uncertain and ambiguous situations.
• Masculinity/feminity: the extent to which a society values quantity of life (e.g. accomplishment, money) over quality of life
  (e.g. compassion, beauty).
  
  

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