Journal of Diversity Management – Fourth Quarter 2007 Volume 2, Number 4

Cultural Diversity:
Implications For Workplace Management
Donatus I. Amaram, Virginia State University

ABSTRACT

The acceptance and management of cultural diversity have been promoted and touted as a
positive tool in social and organizational engineering aimed at solving and preventing group
dynamics problems in both business organizations and society as well. Positive attributes of
cultural integration in business organizations have received fair and significant attention in the
past two decades. What have not been sufficiently presented are the challenges and pitfalls
inherent in the management of culturally diverse work groups. For the practicing manager, there
is a need to know when and where mono- and multi-cultural arrangements may be preferred. This
paper reviews relevant research findings that can be used for building effective paradigms in the
management of cultural diversity in the workplace.

INTRODUCTION

T
he last two decades have seen significant efforts on the part of scholars and policy makers to embark
on initiatives to acknowledge, accept, and value cultural differences among ethnic groups in place of
the traditional melting pot approach whose objectives have been to assimilate minorities into the
mainstream at the expense of their cultural identities. This changing accent on accepting differences and diversity
has led to a new and emerging school of thought on how to manage people and organizations for effective
performance in a globally competitive business environment. This requires crafting management concepts and
application techniques to deal with the challenges and opportunities posed by an increasingly diverse culture. These
challenges and opportunities include cultural influences on job satisfaction, levels of inter-group biases and
prejudices, degrees of cooperativeness and overall individual and group performance. This paper reviews the
“culture literature” and attempts to synthesize research findings on the effects of cultural diversity on issues and
attributes relative to comparative work behavior of various ethnic groups.

CHANGING PERSPECTIVES OF CULTURAL DIVERSITY

Efforts to protect and improve the rights of minorities over the past two decades have led to a rethinking of
the propriety of the “melting pot” mentality and the exploration of new perspectives on the management of cultural
diversity in the workplace. Cultural diversity has been defined as “the representation, in one social system, of people
with distinctly different group affiliations of cultural significance” (Cox, 1993). The traditional approach to handling
multiculturalism in complex organizations has been to expect members of the minority culture to adapt to the
cultural requirements of the majority group. What forces have triggered the subtle but perceptible shift away from
assimilation and towards diversity? Several organizational dynamics contribute to the growth of the diversity
perspective. First, a quest for social justice, though a goal of the assimilation concept, has been largely elusive under
it. Moral, ethical and social responsibilities toward minority members of society and of business organizations in
particular have provided the impetus for a search for new and better paradigms to improve the lot of racio-ethnic and
gender minorities. Second, legal obligations arising from civil rights laws and the attendant affirmative action
programs have made it necessary for organizations to find alternative ways to eliminate racial and gender
discrimination in education and employment (Ramakrishnan and Balgopal, 1995). Third, the limitations of
affirmative action which have led to calls for new proposals to replace it, (Gottfredson, 1992, p.279; Thomas, 1990,
p. 107) and the strategic imperatives imposed on American businesses for competitive advantage in the global
marketplace, have created more pressures to acknowledge and deal with cultural diversity in a way that recognizes

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Journal of Diversity Management – Fourth Quarter 2007 Volume 2, Number 4

and works with differences in cultures without denigrating or submerging some under others. Globalization, with its
multicultural implications, has become an indispensable factor in strategic competitiveness. IBM, Exxon, Coca
Cola, and Dow Chemical, for example, derive, at least, half of their revenues from other countries. For the first time
since World War I, immigrants make up the largest share of recent growth in the population and the labor force.
Experts predict that business leaders who ignore these demographic trends will find themselves at a competitive
disadvantage (Copeland, 1988b; Nkomo, 1992). Hitherto, cultural differences were perceived only in terms of ethnic
and nationality constructs. Now, cultural considerations include race, gender, sexual orientation, age, disability etc.
These subgroups possess different work attitudes, perceptions, values and norms which, in turn, affect individual
and group performances. The conclusions of Workforce 2000: Work and Workers for the 21st Century (Johnston,
1987), highlight the importance and impact of changing workforce demographics and diversity in organizations.
Differences in cultural composition of the workplace lead to tensions and conflicts over cultural issues, particularly
from minority workers who are more likely to feel oppressed by the differences. For business organizations, these
changes offer both opportunities and challenges.

DIVERSITY AND ORGANIZATIONAL SUCCESS FACTORS

The observed effects of cultural diversity on organizational behavior have been multi-variant and seem to
depend on how different groups are combined and permuted in the workplace. Rubaii-Barrett and Beck (1993)
examined the similarities and differences in work climate perceptions and levels of job satisfaction among Anglo-
American and Mexican-American local government employees and reported that Mexican-American employees felt
higher levels of satisfaction with personnel procedures than did Anglo-American employees. Because the Mexican-
Americans constituted the majority of the two groups, it was inferred that cultural differences rather than numerical
minority status were responsible for the observed differences in work attitudes on the part of the Anglo employees.

One area of cultural differences which has been studied sufficiently over time is the contrast between
individualism and collectivism and the impact on behavior of people from nations in which various ethnic groups of
the United States have historical roots (Triandis, McCusker, and Hui, 1990). Asians, Hispanics and Blacks have
roots in nations with collectivist cultures, while Caucasians have roots in the European tradition of individualism
(Hofstede, 1980, Inkeles, 1983). This fact has been used to predict the effectiveness of management practices
relative to team work and group cooperativeness. Earley (1993) examined 163 managers from China, Israel and the
United States to assess the effects of individualistic/collectivistic cultural beliefs on performance and found that the
performance of individualists (those from the U.S.) was lower when working in a group than when working alone,
while the performance of collectivists (those from China and Israel) was lower when working alone than when
working in a group. Perkins (1993) corroborated these findings, and went further to assess attitudes and preferences
relative to work- group structures and found that those from cultures that view relationships in terms of hierarchy or
pecking order have a preference for highly structured teams while those from individualistic cultures felt more
comfortable with voluntary and informal teams.

IMPACT ON COOPERATIVE AND COMPETITIVE BEHAVIOR

Team work and competitive assignments are legitimate and recurrent tools in the strategic activities of
many business organizations. Knowledge of how cultural diversity affects the effectiveness of these work
arrangements is significant for managerial decision making. Cox (1991) examined the effects on group tasks of
ethnic group differences between Asians, Blacks, Hispanics and Caucasians and concluded that those from
collectivist cultural traditions exhibit more cooperative behavior than those from individualistic cultural origins. In
addition to inter-cultural differences, some intra-cultural attributes have been found to exert significant behavioral
tendencies that affect interpersonal interactions. Physical observable differences or phenotypes, for instance, affect
the level of acceptability and assimilation of organization members even within their own cultural groups. It is not
surprising that persons of phenotypes different from the majority group tend to have less favorable work experiences
and career outcomes (such as satisfaction, compensation, promotion etc) than persons from the majority phenotype.
What is surprising is that within the same group, differences in physical attributes do affect these issues with equal
force.

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CAREER IMPLICATIONS

Within phenotypes there is an inverse correlation between the amount of physical distinctiveness from the
majority group and career outcomes. All things being equal, it has been found that women with long hair and ultra
feminine dress fare less well than women with shorter hairstyles and more masculine dress; and non-Whites of light
skin color fare better than non-Whites of darker skin color, leading one researcher to conclude that “skin color is
probably the most important single index for uncritical human evaluation” (Lincoln, 1967, p. 527). There is
evidence that strong identification with the majority culture enhances one’s career progression. Furthermore, it has
been noted that organizational members with mono-cultural minority-group identity have more negative career
experiences than those with other identity affiliations. Biculturals are at a disadvantage compared to mono-majority
members but experience better career outcomes than those of mono-minority members (Bell, 1990).

Career outcomes tend to be more positive when phenotype and culture are congruent than when they are
dissimilar (Cox, 1993, p. 62). Thus, it’s instructive for managers to note that an organization’s cultural mix affects
the ability of out-group members to perform within the organization. Some derivatives of cultural diversity that
negatively affect minority culture members include prejudice, discrimination and stereotyping. Prejudice here is
understood as a prejudgment of someone on the basis of some characteristics which may include cultural
idiosyncrasies, while discrimination speaks to behavioral biases toward a person based on his/her group identity.
Research suggests that minority group size also affects the level of discrimination.

Majority group members tend to increase levels of discrimination against minorities when the latter’s
percentage of representation is low (Blau, 1977). Stereotyping also presents an obstacle to minority group members
of an organization. Stereotyping is a form of prejudgment by which we attribute to an individual the supposed
attributes of the group from which he comes. Research findings suggest that stereotyping can have significant
negative effects on both individual careers and overall organizational performance. For example, stereotyping has
been found to affect hiring, promotion and performance evaluation decisions of overweight people, older employees
and applicants, as well as people with disabilities (Everett, 1990)).

TRENDS IN PREJUDICE/DISCRIMINATION

Are the influences of culturally-associated prejudice and discrimination declining or increasing over time?
There is evidence for both sides of the argument. Firebaugh and Davis (1988) concluded that prejudice declined
significantly in a study of African Americans from 1972 to 1984. An American Management Association study
concurred and concluded that the increases in minority representation in managerial positions were largely
attributable to changes in attitudinal dispositions toward minorities rather than government-mandated affirmative
action programs (Romano, 1995, p.6). On the other hand, several research findings have suggested that significant
prejudice toward cultural minorities persists (Cockrel, 1989). In a study of 200 Black professionals, Morrison (1992)
found that prejudice in its various subtle forms pervaded organizational decision making and caused widespread
disappointment, frustration and anger among these professionals struggling to advance in a culturally hostile
atmosphere. Organizational members from minority subgroups also face obstacles from ethnocentrism within an
organization’s culture. Ethnocentrism is the inclination for majority-group members to view themselves as the
center of the universe, to interpret minority out-group members from the perspective of the majority group, and to
evaluate beliefs, behaviors, and values of the majority group more positively than those of the minority group
members (Shimp & Sharma, 1987). The overall conclusion is that prejudice, discrimination and stereotyping are
widely practiced in organizations and negatively impact the careers of minority group members (Lester & Caudill,
1987; Schweltzer and Deely, 1982). As the workforce grows more diverse, tensions over cultural issues are bound to
exacerbate. The attendant cultural conflicts can be a drain on the energy of the people involved. Demographic
changes which estimate that only 15% of new entrants into the labor force are white males, compared to 47% just
twenty years ago, will command changes in the management of organizational culture and force organizational
adjustments in terms of structural integration and institutional biases. Organizations now recognize the impact of
diversity on performance and profitability as was predicted by the Hudson Institute’s study “Workforce 2000: Work
and Workers for the 21st Century (Johnston, 1987). Diversity brings with it advantages or opportunities as well as
disadvantages and challenges.

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Journal of Diversity Management – Fourth Quarter 2007 Volume 2, Number 4

ADVANTAGES OF DIVERSITY

There is substantial literature which argues that diversity has performance advantages over homogenous
work structures (Cox, Lobel and MacLeod, 1991; Cox and Blake, 1991). First, multicultural organizations have an
advantage in attracting and retaining the best talent. The capabilities of women and minorities offer a wider labor
pool. Organizations that are able to attract and retain qualified minority group members and keep faith with them
through fair and equitable career advancement treatments, gain competitive advantage and derive high quality
human resources dividends. Second, a multicultural organization is better suited to serve a diverse external clientele
in a more increasingly global market. Such organizations have a better understanding of the requirements of the
legal, political, social, economic and cultural environments of foreign nations (Adler, 1991). Third, in research-
oriented and hi-tech industries, the broad base of talents generated by a gender-and ethnic-diverse organization
becomes a priceless advantage. “Creativity thrives on diversity” (Morgan, 1989). Fourth, multicultural
organizations are found to be better at problem solving, possess better ability to extract expanded meanings, and are
more likely to display multiple perspectives and interpretations in dealing with complex issues. Such organizations
are less susceptible to “groupthink.” Fifth, multicultural organizations tend to possess more organizational
flexibility, and are better able to adapt to changes. Women, for instance, are said to have higher tolerance for
ambiguity than men (Rotter & O’Connell, 1982). A study of the U.S. Forest Service suggests advantages of a
culturally diverse organization in the development and management of natural resource policies. It concluded that
the creation of a diverse mix of employees was not only more reflective of the diverse public which the Forest
Service serves, but also resulted in better land management decisions that were more responsive to the desires and
needs of the populations served (Brown and Harris, 1993).

DISADVANTAGES OF DIVERSITY

Diversity has some drawbacks which moderate its significant advantages. In problem-solving situations,
extraordinary costs in time and financial resources can negate the benefits of synergy, and can even degenerate into
dysfunctional conflicts. Diversity does not fare as well under conditions of uncertainty and complexity which may
lead to confusion and frustration. Diversity can make it harder to arrive at an agreement on a particular course of
action, and can result in negative dynamics and cultural clashes that can create work disadvantages for women and
minorities. Traditionally, cultural conflicts between majority and minority group members are usually resolved in
favor of the majority groups. This, in turn, creates significant barriers to full participation by minority members in
potentially conflict situations. In an analysis of 151 work groups, Tsui, Egan and O’Reilly (1992) found diversity to
be associated with lower levels of psychological identification with group members which would tend to detract
from overall performance and result in adverse effects on organizational measures of productivity, absenteeism and
turnover. Homogenous groups have been reported to outperform culturally diverse groups especially where there are
serious communication issues which make it more difficult for everybody to make optimal contributions to the
group effort (Sheridan, 1994).

Higher turnover and absenteeism are special problems identified with multi-cultural organizations. Several
research studies since the 1960’s have found women and other minorities to be consistently higher on absenteeism
and turnover than their majority-member counterparts. Turnover for Blacks has been recorded at 40% greater than
for Whites (Bergmann and Krause, 1968). A Corning Glass study reported that between 1980 and 1987, turnover
among women in professional jobs was double that of men and the rate for Blacks was 2.5 times greater than for
Whites (Hymowitz, 1989). Schwartz (1989), and Scott and McClelan, (1990) arrived at similar findings of two-to-
one turnover rate for women versus men. Meisenheimer (1990) found a 58% higher rate of absenteeism for women
compared to men. In a study of twenty work units, O’Reilly, Caldwell and Barnett (1989) concluded that
heterogeneity in groups was associated with lower levels of group social integration which resulted in higher
individual turnover. They concluded that out-group members were more likely to leave the organization. Using a
hypothetical company of 10,000 employees, Cox estimated that absentee differences attributable to multiculturalism
would cost a company an average of three million dollars per year (Cox, 1993, p.25).

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Journal of Diversity Management – Fourth Quarter 2007 Volume 2, Number 4

LESSONS FOR MANAGEMENT

In the face of mixed findings from research, and the social and legal imperatives for organizations to
accommodate multi-cultures, practicing managers have a dialectic responsibility in deciding not whether, but when
and how to exploit and capitalize on the positive attributes of cultural diversity while avoiding its downsides.

The first step is to understand that one of the primary objectives of diversity is to acknowledge people’s
individualities. This requires organizations to transform from mono-cultural to multicultural models of operation.
This takes a three-step development process (Gottfredson, 1992). First is a monolithic stage characterized by a
demographically and culturally homogenous structure. This is exemplified by traditional Japanese firms that
employed only Japanese males. Second is a plural representative stage where an organization, though culturally
diverse in its rank and file, maintains a culturally homogenous leadership. Sub cultures and groups are then expected
and encouraged to adopt the culture of the leadership. This characterizes many current American organizations. The
final stage is the truly diverse model where multicultural accommodation is evident throughout the organization.
Companies at this stage value diversity and encourage it through a variety of ways that include two-way learning,
and mutually reinforcing adaptation, interdependence and appreciation of cultural differences. Research makes
several suggestions in effective and successful management of cultural diversity. Top management support and
commitment must be evident. CEO’s must also be willing to submit to diversity training to appreciate organizational
barriers that impede full contributions from all members. Second, diversity must be a part of an organization’s
planned business objective including its outreach programs, rather than a mere technical effort to fulfill affirmative
action or similar legally-mandated activity. Third, there should be a mechanism to hold managers accountable for
meeting diversity goals. This should be reflected in the performance evaluation process. The acid test should include
how much and how fast the organization breaks the “glass ceiling” to increase the percentage of minorities and
women in the higher salary echelons through career development opportunities, mentoring and meritorious
executive appointments. Fifth, there must be open communication lines that allow for transmission of new ideas,
grievances and feedback. Finally, organizational rituals and rites should make room for such things as religious
holidays, diet preferences and dress modes that do not interfere with organizational activities. These are little things
that demonstrate respect and support for cultural diversity. In addition, successful diversity management requires
managers to “unlearn practices rooted in an old mind set, change the ways organizations operate, shift organizational
culture, restore policies, create new structures, and redesign human resource systems”(Cox, 1993).

CONCLUSION

The challenges from an increasingly diverse workplace require a search for new ways for managing
behavior. Traditional paradigms that overly focus on efficiency and profitability may not be adequate to understand
the dynamics of the future multi-cultural organization. More emphasis on the current trend toward non-hierarchical,
decentralized and flat organizational structures will be a positive step forward. Over and above all this is the creation
of a climate that accepts and values the opportunities and challenges inherent in a diverse workforce.

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