Cultural Diversity and Economic Performance

Question: Discuss about the Cultural Diversity and Economic Performance. Answer: Introduction Cultural diversity among the employees is a major issue for an organization. In many workplaces, the workers come from different countries carrying with them different language, cast, religion, and lifestyle. Cultural diversity has both positive and negative aspects. Whereas diversity can enhance creativity of the employees, it can also create a situation of conflict. Therefore, the leaders of the organization are required to take effective measures to handle cultural diversities. According to McInnes (2013), in many instances, the leaders face resistance from the employees. Those employees belonging to culturally diverse background often suffer from insecurities. Vance Paik (2015) explained that they feel that the organization would show discrimination towards them. However, it might not be the issue. In such a situation, even the leaders could not communicate with them effectively. It is primary to understand where the problem lies, and if the leaders fail to interact properly wit h the employees, measuring the situation becomes difficult. Again, the organization could not make them realize that cultural diversity conflict is harmful for the organization. Here in this case study, the focus will be on the Australian organizations and their leadership practices that emphasize on managing cultural diversities because Australia is a culturally diverse country. According to Bellini et al (2013), cultural diversity, if maintained properly, can become advantageous to the companies as it helps the leaders to take better decisions. On the other hand, diversities can be a reason of decreased productivity due to various reasons. People of different cultural background not always get along with each other well. As discussed by Trax et al (2015), they indulge into heated debates and try to dominate the other person. If diversity exists in a large scale, the differences in opinions make the situation worse. Again, the minority people may feel that their sentiments are not considered by the organization. Turnovers and absenteeism are two serious results of diversity conflict. It is the responsibility of the leaders to remove the barriers. Otherwise, the conflicts may damage the reputation of the organization. According to Barak (2013), the AHRC (2016), Leading for change publication has identified that the leaders should find out the cultural diversity within the organization. The success of the leaders depends not only on the productivity of the organization but also on the reputation of the organization as a place of work. Conflict arises when the leaders do not pay attention to empowering the employees and understanding their sentiments. Australia is among worlds most culturally diverse countries. However, it is found that many workplaces still does not practice inclusive leadership that should consider the contribution of all employees. It is also found that most of the senior leaders do not fall into this culturally diverse section. Walsh (2014) explained that cultural diversity is not found in large numbers among the members of the ministry. Therefore, in many instances the leaders are unaware of cultural diversity management. Inclusiveness and belongingness are the two methods through which diversity can help the leaders and the employees to work under the same roof cooperatively. According to D'Netto (2014), under-representation of diversity found in leadership can encourage discrimination and bias. Favoring someone over others within a same workplace is often found because the leaders do not belong to the culturally diverse group. As a result, the company has to face financial crisis. It is found in a large scale within the workplace. According to Forrest Dunn (2013), two most important elements of the process to incorporate diversity within the organization are the inclusiveness and belongingness. Harvey Allard (2015) opined that the employees should feel they are integral parts of the organization. Leaders should practice inclusive leadership that encourages such an inclusion. According to Zaballero Kim (2014) Tesltra, the practice of inclusiveness is found. It actually improved their productivity. Many other companies can follow the practices done by Testra to manage cultural diversity. According to Dobbin Kalev (2013), the leaders can remove such barriers through training programs. However, they should have an effective strategy that respects sentiments and perspectives of all the employees. Al Ariss et al (2014) opined that the training program should also encourage the employees to communicate and share with the culturally diverse colleagues. Cultural diversity is a serious issue and it is mainly the duty of the organization to manage them. Inclusiveness ensures an improved workplace environment. All the employees start to feel that they are part of that organization. The keep their faith on the leaders and happily give their best performance for the organizational development. According to Singal Gerde (2015), employees often face racism within the companies by the leaders and they dont gather the courage to stand against their employers. Martn Alczar et al (2013) opined that the company does not understand the diversity situation. According to Peretz (2015), the leaders, instead of encouraging the employees, they judge them according to their races. They inherit negative perceptions about the minorities and incorporate the notions into their decision-making. Guillaume et al (2013) opined that people bore some stereotype notions about people of Asian background. Griffin (2013) said that many Australians feel that they are submissive and quite. Leaders often misjudge the employees merits and demerits because their subjective beliefs about any particular race. According to Wrench (2016), the organizations should employ more culturally diverse people in the senior positions of the company. Marfelt Muhr (2016) discussed that it cannot be denied that if the leaders themselves belong to the culturally diverse community, they try to understand the perception of the minorities present in the organization. Even the employees can feel the urge to communicate with them. Kirton Greene (2015), once CEO of German America Andrea Jung, shared her experience about how much her employees considered her unable to become a leader and she proved them wrong through her work. One can say that such practices give immense encouragement to the employees and the leaders belonging from different cultural background. According to Janssens Zanoni (2014), it also improves performance. Faems Subramanian (2013) opined that the employees do not feel alienated in such a situation. Cultural diversity should be seen a natural phenomena. It should not be correlated with anyones merits and capabilities. In workplaces too, the employees should feel that they are not judged according to their races, instead the organization is capable of considering their performance. This is the main reason of conflicts among the employees. They start believing that the organization is biased toward the majority. The culturally diverse people, therefore, try to justify their own points. They see everything in a negative light. Organization should understand the situation before extends further. It is difficult for a company to measure cultural diversity. According to Lauring (2013), the more improved the data is, the better the assessment can be done. Leadership commitment plays an important role here. Sabharwal (2014) opined that the leaders cannot analyze the situation and understand the diversity related issues without data. As discussed by Richard et al (2013), however, it is a fact that diversity is not always possible to measure through quantifiable data. Therefore, it is difficult for the leaders to measure the progress or deterioration on cultural diversity. Ashikali Groeneveld (2015) opined that again, measuring the cultural diversity is a complex issue. It is more complex than measuring gender diversity because someones perceptions about culture might be a result of more than one feature. According to Christiansen Sezerel (2013), for example, a person might be an inhabitant of Australia and bore the sense of identity of an Australian, yet he might have a backgro und of Italian culture. The setting of targets is an effective solution rather than the quotas that is found in the workplace. Through target setting, the capable employees will get a chance to prove their works. Ortlieb Sieben (2013) discussed that the setting of target should be guided by various policies for maintaining the performance level and also the targets should be achievable so that the employees do not feel the organization forces them. According to Kramar (2012), again, the wrongly set targets might send wrong perception about the leadership and the organization. Nica (2013) opined that target setting is a useful method although it is found that many organizations do not feel the need and they do not understand how to implement it. Therefore, the companies do not implement such policies. According to Chrobot-Mason Aramovich (2013), Australian Human Rights Commission propounded the cultural diversity tool. The tools help the employees and leaders to monitor the progress on cultural diversity. Sultana et al (2013) opined that it sends a message to the employees that the organization is concerned about their employees. The employees also feel that cultural diversity is a concern. Many companies are not legally approved to conduct such a research through collecting data. Still, some companies feel that measurement of cultural diversity is important to evaluate the situation. The leaders should understand the cultural diversities first before influencing the employees. However, it is important to motivate the employees to care about the company. They should be encouraged to perform. This is what the leaders can do by effective tools. Step 5: Recommendations: There are multiple problems regarding cultural diversity within the organization. However, these could be eradicated if the organization plans the diversity management. Some recommendations for diversity management are as follows: The organizations can initiate inclusive leadership. By doing this the leaders will get to know and understand the employee background and cultural diversities. It will help them grow as a leader and solve crisis situations. The organizations can make bias interrupted programs. Through this, they can explore various perspectives about otherness. It can be done through recruitment, leading the team, and talent identification. Through effective training sessions, professional skills of the employees can be increased. The employees from different cultural background can be offered various types of scholarships as a token of encouragement. The leaders can stand and talk against the racial discrimination. The leaders belonging to different cultural background should be recognized by the organization as an integral part of the organization. Communication networks can develop interactivity among the employees. If the employees start respecting each others perspectives, the situation of conflict will not arise. It is the duty of the organization to establish such network groups. Employee action groups can also give effective results. However, it is a part of inclusive leadership. Such groups promote and celebrate the diversities in the workplace. Through websites and serious videos, the knowledge of diversity can be imparted to the employees. The leaders should encourage the employees to practice emotional intelligence that develops self-control among them. The leaders should practice it themselves too. The organization should not neglect any minor issues related to diversity conflict. They should gather knowledge about it through collection of data. Diversity should not be promoted negatively. It should be encouraged by the organization. Conclusion: It can be said that cultural diversity is not a negative aspect rather the organizations should see it in a positive light. Identifying the racial discrimination is not an easy task. It is a fact that some prejudices are deliberately practiced by people rather they are inherited from the age-old traditional beliefs. It may also be that those who feel the biasness are feeling it in multiple dimensions. For example, the women of culturally diverse background may feel the discrimination from double aspects. Therefore, identification becomes complexMany organizations such as Facebook, Tesltra, Mastercard are seen implementing diversity management initiatives. Those have given positive results too, which is the increased productivity. Inclusive leadership is such a step. However, it has a wide connotation and includes multiple steps. It should be remembered that organizational success depends on its stakeholders. Therefore, the leaders should encourage and motivate them for the developmen t of the company. Through the problems, solutions and recommendations these issues are tried to highlighted. References: Bellini, E., Ottaviano, G. I., Pinelli, D., Prarolo, G. (2013). Cultural diversity and economic performance: evidence from European regions. In Geography, institutions and regional economic performance (pp. 121-141). Springer Berlin Heidelberg. Trax, M., Brunow, S., Suedekum, J. 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