Multinational Companies and Diversity Topics


In the current globalized society, it is common to find cases where an organization hires people with different cultural backgrounds, race, religion, level of education, gender, among other demographical factors. Diversity in the workplace is becoming a common phenomenon that organizations cannot avoid. According to Mor-Barak (2014), diversity in the workplace is more common in multinational organizations than it is in small and geographically limited firms. Companies operating in the global market are forced to hire parent country national, host country nationals, and third-country nationals because of various reasons. The need to get the relevant expertise, the desire to cut costs, and a firm’s social responsibilities that force it to hire locals are some of the reasons why many multinational organizations have highly diversified teams of employees. In a study conducted by Stahl, Tung, Kostova, and Zellmer-Bruhn (2016), the pattern of diversity is common among most of the top multinational organizations irrespective of their geographical location. The workplace diversity at Nestlé S.A., especially in its overseas branches, is just as much as it is at the Coca-Cola Company.


According to Hays-Thomas (2017), diversity at the workplace is beneficial to a company. Differences in personalities, practices, culture, and way of life of employees create a platform where weaknesses of one person can be countered by strengths of another person. For instance, age is one of the common areas of diversity in many of these organizations. Allowing a young and inexperienced college graduate to work alongside an elderly employee who is nearing retirement is beneficial to an organization and employees involved. The elderly worker will transfer his skills and experiences to the young college graduate (Bolman & Deal, 2017). On the other hand, the younger employee can handle more physically demanding jobs, making the work of the elderly employee less demanding. The relationship not only benefits the two employees but also the firm. By the time the senior employees retire from the firm, their skills and experience would have been transferred to the younger generation of employees. A study by Cuervo-Cazurra, Inkpen, Musacchio, and Ramaswamy (2014) shows that although men are likely to perform better than women in physically demanding jobs, women are superior to men when it comes to multitasking jobs. Having a workplace where there is a proper balance of men and women is, therefore, beneficial to a firm. Other diversity-related factors such as race, religion, and education are also beneficial to a firm.

Diversity in the workplace, as beneficial as it is, has been a major concern in many companies around the world. Mor-Barak (2014) observes that in many cases people fail to appreciate the significance of their socio-political, cultural, and gender differences. The problem starts when people align themselves based on the perceived similarities. It may be based on gender, race, religion, political affiliation, culture, or level of education. After forming such discriminatory alliances, they start viewing others as outsiders who they cannot interact with easily. The more educated employees may start viewing their other colleagues with contempt and even blame them for dismal performance at the company. On the other hand, the younger generation may view the elderly employees as clumsy and too rigid to embrace emerging technologies.

Racial intolerance is a common problem in diversified organizations. The Whites may be uncomfortable among Blacks and vice versa (Hays-Thomas, 2017). Women may feel less appreciated by men, while some men may view women as a threat to their career progress. When such suspicions and intolerance are given room to thrive in an organizational setting, Mor-Barak (2014) argues that it may not be possible to achieve the set goals and objectives. Such employees may deliberately sabotage the work of their colleagues to make them be seen as incompetent instead of helping them to achieve an organizational goal. When team spirit is eliminated in such a setting, the overall performance of the affected company becomes compromised. In this paper, the focus is to determine how multinational organizations deal with the problem of diversity in the workplace.

Problem Statement

The world has become a global village thanks to emerging technologies, and diversity in the modern workplace is unavoidable (Laroche & Yang, 2014). It may come in the form of race, age, gender, cultural beliefs, or any other demographical difference that may exist among employees. Ideally, diversity is expected to be beneficial to a firm. Weaknesses of one group of employees can easily be addressed by the strength of another group. For instance, the inexperience of young employees who are fresh from college can be managed by long years of serving that the elderly employees have. On the other hand, the youthfulness and strength of these inexperienced workers can be beneficial to the aging employees. Having such a mutually beneficial relationship is critical to the success of an organization. However, Holz (2016) says that it is unfortunate that the diversity of employees is seen as a problem instead of strength within an organizational setting. In the modern society, some people still insist on identifying themselves along the lines of their race, gender, religious beliefs, age, or such other demographical factors. In such settings, it is common to find cases where Whites avoid other races for baseless reasons. Sometimes women avoid the company of men basically because of gender differences. The inability of employees to integrate into the workplace can be challenging to the management. Such employees may avoid assignments that force them to work alongside people who they do not identify with on various contexts. Working as a unit within the firm becomes a problem and divisions become common.

The problem can escalate to the level of discrimination if corrective measures are not taken at the right time (Laroche & Yang, 2014). Such actions are counter-productive. They kill creativity and ambitiousness among employees. They make workers develop defensive skills, especially those who feel oppressed and despised, instead of focusing on the common goals of the company. Failure to address problems associated with diversity can be dangerous to the company. The problem is worsened if a firm is operating in a global market where racial diversity cannot be avoided. Triana (2017) observes that institutional racism is one of the biggest problems that some firms have to deal with in the modern society. Stereotypes such as Blacks are always criminal-minded, or Jews are self-centered can destroy interpersonal relationships at work. The belief that the aging population is physically weak and slow to embrace emerging technologies can hinder the ability of senior employees to integrate effectively with younger workers to facilitate sharing of skills and passing on of experience needed to achieve the desired success. Divisions within the workplace cannot be beneficial in any way. It is always associated with many problems within an organizational setting. Mor-Barak (2014) warns that a firm that fails to manage diversity in the workplace risks failing to achieve sustainability in its operations. As such, managing problems related to diversity in the workplace is unavoidable.

Significance of the Study

The modern society is embracing diversity as emerging technologies, especially in fields of transport and communication, eliminate geographic barriers to the movement of people from one place to another. According to Chin and Trimble (2014), people are migrating from one part of the world to another because of various reasons, top of which is to search for better economic opportunities. In Switzerland, immigrants account for a significant proportion of the country’s population, and most of them are gainfully employed in several companies. The United States has remained one of the most popular destinations for immigrants from all over the world. Canada, Australia, and other European countries are also receiving a significant proportion of immigrants. The movement is creating scenarios where workplaces are highly diversified. Ozbilgin (2015) observes that it is rare to find a large company that does not have a mixed-race workforce in most of the European and North American nations. For multinational companies, the diversity is even greater both at management and non-managerial positions. For instance, the Coca-Cola Company has Africans, Europeans, Asians, Arabs and other races at its top leadership positions. The same trend is witnessed in most of the large global companies. The diversity enables these companies to understand the uniqueness in various markets, which makes it possible to deliver superior value to customers based on their tastes and preferences.

According to Yip and McKern (2016), despite the obvious benefits of diversity in the workplace, many companies struggle to manage challenges that are associated with it. Bringing together people of different culture, age group, gender, and race to work as a unit may be challenging. The work culture in Japan is different from that in the United States. In Japan, it is common for employees to work for over 10 hours because it is the culture that they have been taught. On the other hand, the United States’ employees are keen on observing the eight-hour work schedule (Gooderham, Grøogaard, & Nordhaug, 2013). When a Japanese manager is hired to supervise United States’ employees, it may be challenging to have a workplace environment that employees consider conducive. What one group considers normal is abnormal to the other group. However, a multinational organization cannot avoid diversity in the workplace. They have to find a way of addressing challenges associated with the multiplicity to enjoy benefits that comes with it.

The study seeks to identify challenges associated with diversity in the workplace, especially for multinational corporations. The study will also look at benefits that come with the diversity. The study will then focus on finding ways of eliminating challenges to enable these organizations to achieve success in the global market. Different organizations deal with the issue of diversity in varying ways. It is also true, as Schellwies (2015) observes that various global companies’ level of success in managing diversity also differs. Finding common mistakes that firms commit when managing a diversified workforce is critical in this study. The research will look at how these mistakes can be addressed at different levels of management within an organizational setting to achieve desired goals. This document will be important not only to the large multinational corporations around the world but also mid-sized companies with a diversified workforce.

Research Questions

The primary goal of this study is to determine how multinational corporations around the world deal with problems arising from diversity of the workplace. The following is the fundamental question that will guide the process of collecting data from respondents:

How do multinational companies, from an organizational point of view, deal with problems that arise in connection with new diversity topics?

Answering the above question will be fundamental in coming up with a solid conclusion of how diversity should be managed in an organizational setting. It will also enable the researcher to come up with a series of recommendations on how firms struggling with the issue of diversity can address these challenges. The following are the supportive questions that will help in responding to the above primary question effectively:

  1. What are the fundamental challenges associated with a diversified workplace environment?
  2. What mistakes do firms commit when trying to manage diversity in the workplace?
  3. What are the benefits of having a highly-diversified workforce?

Aim and Objectives of the Study

According to Earley and Mosakowski (2016), when conducting research, it is important to define aim and objectives in clear terms to help guide the process of finding the right information that would inform a conclusion. In this study, it was important to come up with information on how companies can deal with the issue of diversity in the workplace. The following is the aim of this research:

To define how multinational companies manage problems associated with diversity in the workplace

To achieve the above aim, it is necessary to come up with specific objectives that will help in focusing the study towards a specific direction. The supportive questions above will form the basis of the research objectives. They include the following:

  1. What are the fundamental challenges associated with a diversified workplace environment?
  2. What mistakes do firms commit when trying to manage diversity in the workplace?
  3. What are the benefits of having a highly-diversified workforce?

Literature Review

Diversity in the workplace is a topic that has attracted numerous scholars over the recent past. It is important to review what they have found out in their research to help in developing a basis for this study. According to Molinsky (2013), a researcher needs to avoid duplicating already existing information. A new study should bring new insights into a topic or address conflicting information in that field. As such, review of the literature offers a perfect platform to understand what other authors have discovered in their studies of diversity in the workplace. Looking at the knowledge gap based on the review helps in defining the right focus that this and future studies should take. In this section of the paper, the researcher will conduct a comprehensive review of literature on this topic.

Understanding the Concept of Diversity

Diversity as a concept has gained popularity over the past decade because of the increasing level of globalization and interaction among people of varying backgrounds. Notarnicola (2015) defines diversity as “the condition of having or being composed of differing elements, especially the inclusion of different types of people (based on race, religion, age, gender, social orientations, and beliefs) in a group or organization” (p. 81). It is the ability of people from these diversified backgrounds to work as a unit within a common setting to achieve a common goal. Diversity entails respect and acceptance irrespective of whatever differences (perceived or real) that may exist. According to Gooderham et al. (2013), diversity “means understanding that each person is unique, and recognizing our differences along dimensions of race, ethnicity, gender, sexual orientation, socio-economic status, age, physical abilities, religious beliefs, political beliefs, or other ideologies” (p. 41). One must understand that even identical twins have independent thoughts and they may disagree on policies or issues that affect them in a given setting. The physical or socio-economic differences that exist among a people should not be considered a dividing factor. Diversity should be celebrated because it demonstrates the uniqueness of every member of a given group. The society must appreciate the uniqueness of every individual by embracing diversity. Mutual respect is critical in a diversified society.

According to Earley and Mosakowski (2016), diversity is “about understanding each other and moving beyond simple tolerance to embracing and celebrating the rich dimensions of diversity contained within an individual” (p. 41). In many cases, the term tolerance is misused when discussing diversity. When this word is used, it signifies a situation where one has to put up with something that he or she considers undesirable. Tolerance, in its basic meaning, has no place in a society that embraces diversity and the right virtues associated with it. It is misleading for one to say that he is tolerant of people of the other gender, race, or religion. One only puts up with bad habits, which is not part of embracing diversity. When a person is misbehaving in a given setting, the individual should be warned irrespective of the gender, race, age, or any other demographic differences. However, one can never change his or her race.

It is not realistic to hate a person because he is a man. Similarly, it is immoral for a person to expect a colleague to apologize because he or she is a Black, White, Jew, Indian, Chinese, or Arab. A person cannot claim that he is tolerating the fact that some of his colleagues are old or young, tall or short, or whichever differences that may exist. It is the reason why Molinsky (2013) says that diversity involves going beyond simple tolerance. It entails appreciating and celebrating diversity and the richness with which it facilitates approaching various challenges in the society. Diversity involves understanding the fact that we support one another because of our differences. Women can easily multitask while men can handle physically demanding tasks. In any social setting, the two qualities are important in various settings. It means that both men and women have a critical role to play.

Diversity in the Workplace

In the modern workplace environment, it is impossible to avoid diversity. As Andersen (2013) notes, diversity goes beyond the differences in race or ethnicity. In most of the cases, people tend to narrow down diversity to racial differences. However, it goes beyond that. Diversity in the workplace is broad and exists at various levels and in all departments. It is necessary to look at specific aspects of diversity and how they affect the normal operations of an organization.


One of the main areas of diversity in a workplace is the racial differences. According to Parhizgar (2013), racial differences are common in racially diverse countries. The United States is currently one of the most diversified countries in the world because of many years of immigration of people from all over the world. Whites still form the majority of the population. However, the country also has a significant population of minority groups such as Blacks, Hispanics, Aboriginals, Chinese, and Japanese among other groups (Hays-Thomas, 2017). The societal diversity is often reflected in the workplace. These people have to work together in an organizational setting despite their differences in skin color or other factors related to race. For multinational companies, racial diversity is common, and management units have to find a way of handling them. General Electric is one of the leading conglomerates in North America. However, the company has branches in Asia, South America, Europe, and Africa. When hiring, Triana (2017) says that a firm must make a delicate balancing act to ensure that host country nationals (HCN), parent country nationals (PCN) and third-country nationals (TCN) are offered opportunities as would be appropriate. It means that it is unavoidable to find a highly diversified workplace in these overseas branches. Career growth is another factor that promotes racial diversity in multinational corporations (Bertrams, Coupain, Homburg, Kurgan-van, & Mioche, 2013).

Taking the case of General Electric, some of its top managers are from diverse racial backgrounds. It happens because when the top managers identify talents from various parts of the world, they are likely to be promoted rapidly to higher ranks within the firm. Some employees, who were previously hired in Europe, Asia, Africa, and South America, find themselves at the company’s headquarters, holding senior positions. The headquarters become the melting point of racial diversity in such organizational settings. Despite the diversity, these employees have to work as a unit. They have to ensure that their activities are closely coordinated at all times. They have to attend board meetings to discuss the way forward for the company. In such meetings, the difference in skin complexion has no significance. That which is expected of these top executives is to come up with and discuss ideas that can enable the firm to prosper. At junior levels of management and among the non-managerial employees, racial diversity is common. In European countries such as Switzerland, such diversity is promoted by the increasing immigration. Irrespective of the position that different employees hold within an organizational setting, appreciating racial diversity is critical in ensuring that organizational goals and objectives are achieved.


Culture is another aspect of workplace diversity that is increasingly becoming common in the modern society. Sometimes culture may be defined by race or geographical location. However, Triana (2017) warns that it is important to avoid generalization when looking at cultural practices of people. It is possible to find people born and brought up in the same geographic location and of the same race embracing different cultural practices. Culture focuses on religious beliefs, general ways of life (including the perceived position of men, women, elders, and children in the society) and other socio-economic practices. In terms of work culture, diversity may exist on various fronts. Most of the employees from the western nations are often strict when it comes to the time spent at work. They believe that they need to spend eight hours at work, and any additional time deserves additional payment in the form of overtime. However, that is different from the culture in the Far East, especially in Japan and China where it is normal for employees to spend a lot of time at work. According to Mor-Barak (2014), the organizational culture of Germans and most of the Asian countries is often from that in the United States.

The concept of open-door policy has gained massive popularity within most of the American companies. The culture makes it possible for junior employees to visit offices of top managers and express their views about issues they consider of relevance to the success of their company. However, most companies in Germany and the Far East have a strict structure of leadership where employees have a clear channel of communicating to the senior authorities (Marschan-Piekkari, Welch, & Welch, 2014). Employees are expected to contact their immediate superiors with views and issues that affect them or the company. The superiors will be expected to deliver the message to the next level of management, if it is necessary, till the time it reaches the senior officer. The problem with such a rigid structure of management is that it limits the participation of junior employees in the policy-making processes. When an American employee is forced to work in China where the culture of open-door policy is not common, adapting to the new environment may be a challenge. The inability to contact senior managers may be a major issue to such an employee.

Cultural diversity is also defined in the relationship that youths have with the elders. In some societies, especially in most of the Islamic nations, elders are considered the custodians of wisdom and the young generation has no room to question their decisions. In most of the western nations, although the elders are accorded their rightful place in the society, it is common to find cases where their decisions are debated to determine if they can deliver the expected outcome under varying circumstances (Stahl et al., 2016). From this perspective, it may be challenging to have a young executive from the United States, or the United Kingdom assigned the role of managing employees in Saudi Arabia. The executive may be forced by the local culture to consider views of the elderly population even if empirical evidence indicates that a different approach may be more appropriate.

Religion is one aspect of culture that has been divisive in the global society for several centuries. Triana (2017) observes that the religious differences are common in highly diversified societies such as the United States and parts of Europe. Christianity and Islam are currently considered the most popular religious groups in the global society. Islam is dominant in the Middle East and North Africa (MENA) region. On the other hand, Christianity is popular in Europe, North and South America, and parts of Asian and African countries. However, Hays-Thomas (2017) notes that even in regions considered to be dominated by Christians or Muslims, it is common to find minority groups of different religious beliefs. Hinduism, Buddhism, primal-indigenous, Judaism, African traditions, and Sikhism are the other dominant religious groups across the world (Schellwies, 2015). The religious beliefs that people embrace define their cultural practices at work. Religion defines when employees come to work, how they relate to other colleagues, especially those who embrace other religious practices, and the kind of effort they put in assignments given to them. For instance, the majority of Christians believe in going to church on Sundays. As such, it is unusual for them to go to work on that day because they believe it is their day of worship.


Diversity in the workplace is sometimes defined by the age of the employees. According to Mor-Barak (2014), one of the traditional ways of promoting employees from one level to the next was based on age and time served in an organization. Although the practice is still common, it is no longer the primary basis upon which employees are promoted. It is common to find a young employee rising fast to the level of a top executive because of skills and talents that they have. In the same vein, it is also common to find an aging employee who has been unable to rise to a managerial position because they lack what the firm considers the level of competence to lead others (Schellwies, 2015). The new approach to promotion has created an environment where employees of different age groups work in the same departments holding similar positions at management or non-management levels. One of the main issues that are currently emerging with regard to age, as Hays-Thomas (2017) observes, is the ability to adapt to the emerging technologies. In the current competitive global business environment, firms are under pressure to lower their cost of production while at the same time increasing the quality of their products as a way of remaining sustainable. It forces these firms to embrace the emerging technologies to achieve such ambitious plans.

The ability of employees to embrace the emerging technologies varies significantly, and age is a major factor. Triana (2017) argues that some successful firms have learned how to integrate their workforce to ensure that young college graduates work closely with the elderly employees to bridge the gap in technology adoption capacity. The younger generation of employees can help the older workers to understand and easily embrace new technologies. Experience is another factor that is defined by the age and time spent by employees working in a given field. In most of the cases, the older employees often have the experience needed to overcome various challenges and to achieve desired goals in different tasks. Young college graduates lack such invaluable experience. Finding a way through which experience can be transferred from the elderly employees to new college graduates is critical in ensuring that goals and objectives of an organization are achieved.


In most of the traditional settings around the world, gender role was a highly valued concept that defined an important social order of the role of men and women in the society. Men were expected to be the breadwinners in their families while women were expected to take care of their homes and children. However, that social order is systematically changing. According to Mor-Barak (2014), women are increasingly finding themselves in the corporate world where they have to compete against men for various positions. It is now common to find female chief executive officers in Fortune Five Hundred companies, such as Indra Krishnamurthy Nooyi of Pepsi, Virginia Marie ‘Ginni’ Rometty of IBM, Mary Teresa Barra of General Motors, and Safra A. Catz of Oracle Corporation (Schellwies, 2015). These top female executives have proven that women can steer companies to the greatest level of success. It is important to note that most of these top female executives are from the western society, especially in the United States where women have been liberated from stereotypical beliefs that hindered their ability to achieve career success. However, women still find it challenging to achieve career success in some parts of the world because of cultural beliefs that their societies embrace.

In most of the Arab world, the society is yet to fully embrace the leadership of women. As such, it is not easy for them to achieve career success. Hays-Thomas (2017) notes that in most of the western countries, gender is no longer a major diversity issue in the workplace. Men and women mingle easily as they find themselves sharing assignments in various departments. However, that is not the case in some parts of the world. In Saudi Arabia, for instance, women are not expected to have physical contact with men who are not their spouses. The cultural requirement makes it difficult for men to mingle freely with women in a workplace environment. A multinational company that seeks to expand its operations to this country must understand the unique cultural requirement. Although the country has allowed women to engage in gainful employment, some of these cultural practices limit their ability to embrace some jobs. Although a firm may have a diversified workplace in terms of gender, it may be required to set systems and structures that would limit physical interaction between men and women.

Socio-Political Affiliations

Socio-political diversity may also be a common aspect of diversity within a workplace. In the United States, many people take their political affiliations seriously. They understand that the political choices they make define the leadership and the direction the country takes. They believe in specific beliefs and principles directly defined by the political leaders and the political environment. The diversity is often evident during the electioneering periods, especially when electing the president. Although the issue may sometimes be emotive, in many cases it rarely affects activities of companies within the country. However, Holz (2016) warns that top executives and employees in mid or junior managerial positions must understand the existence of the diversity and emotions that politics sometimes elicit. Many companies have strict policies that limit intense political debates, especially during electioneering periods. People are encouraged to focus on their work and pay little attention to political events unless they are relevant or unavoidable. Diversity may also be defined by social factors such as the sexual orientation of the employees. Although the issue may seem irrelevant in an organizational setting, Andersen (2013) warns that it should not be ignored because it can have a serious impact on the interpersonal relationship of employees and their output.

Homosexuality is yet to become a universally accepted concept in many societies, including several western countries. However, many homosexuals are now coming up to express themselves and their orientation to the society. It means that when companies are analyzing the issue of diversity, this must be one of the areas that cannot be ignored. Mor-Barak (2014) argues that many American companies have developed policies that prohibit profiling and discrimination of employees based on their sexual orientation. It means that gays and lesbians can easily express themselves in such American companies. However, care should be taken by large multinational companies operating in the Arab world when addressing the issue of homosexuality. Most of the countries in MENA region and other African countries forbid homosexuality. In these societies, it is odd to discuss such topics and to develop policies that allow the practice may be suicidal. Other than the possible legal and political backlashes that a firm may face, it is also possible that it may be open to attacks by members of the public or terror groups in such societies. Ozbilgin (2015) argues that this area of diversity must be treated with care in some societies to avoid negative consequences.


Diversity in a workplace can also be analyzed based on the level of education. In every organization, the level of education of employees varies. Mor-Barak (2014) argues that in most of the cases, the level of education defines an employee’s position within a firm. Highly educated workers are likely to get to higher levels of management than their less learned colleagues. However, in some cases, employees of varying levels of education have to work in the same department at the same level of management. According to Holz (2016), one’s level of education defines the reasoning approach, major assumptions, and decisions made when addressing specific issues. The difference in the level of education is likely to create a scenario where workers make different decisions on a similar issue because of the knowledge gap. Triana (2017) warns that in such environments, it is common for differences to emerge among employees if proper systems and structures are not put in place. Sometimes an experienced but less learned employee may have a major difference with a highly learned but less experienced colleague in the workplace. Both experience and knowledge are important ingredients in having a successful workplace. However, sometimes it may be important to strike a balance between the two. Systems within the firm should define when experience should be given priority over education and vice versa.


Diversity in the language spoken by employees is a common issue among multinational corporations. Most of these multinationals often prefer having a parent country national as the head of their new branches, especially for the first few months or years of operation. Having the top executive from the company’s headquarters makes it possible to promote a company’s culture in the overseas branches. However, language is always one of the most common barriers. For instance, the official language in Mozambique is Portuguese. Local languages include Mukhuwa, Swahili, and Sena (Notarnicola, 2015). When a top executive from the United States is flown to the country to head the company’s operations, communication may become a major issue. Likely, the American employee may only speak English. The inability to communicate in the local languages may be a major issue.

Diversity in Multinational Companies

The stiff competition in the global market has been facilitated by advanced technologies in the field of transport and communication and improved international relations. In the United States, companies from Germany, the United Kingdom, China, and Japan have moved in to tap into the existing opportunities. These foreign firms have stiffened the competitive rivalry in the market (Schellwies, 2015). It forces the local American firms to find ways of remaining sustainable and expanding their operations beyond the current geographic market. The decision to expand to foreign market not only helps in increasing the market share but also in managing the stiff market competition in the local market. As such, it means that sustainability can only be achieved if a firm is capable of managing the rivalry in the market, and one of the best ways of doing that is to explore new foreign markets.

When a firm decides to go to the global market, it may not be possible to avoid diversity and challenges that come with it in a workplace environment. According to Mor-Barak (2014), a firm can’t have a team of employees only from parent country nationals. Hays-Thomas (2017) identifies various reasons why it is critical to hire host country nationals, even at the management level. A company that has been operating in Switzerland will need the help of the locals if it decides to move to the Egyptian market. First, the culture in Switzerland is significantly different from that of Egypt. For the foreign firm to operate successfully among the locals, it will require local employees to guide it in various ways. For instance, culture defines how promotional campaigns should be developed. In Egypt, which is a predominantly Muslim population, have norms and practices that must be observed when promoting products. A lingerie company cannot advertise its products using models that are skimpily dressed, as is always the case in most of the western nation. Such a mistake may elicit serious complaints and dissatisfaction among members of the public because it goes against their culture.

The presence of locals at the decision-making levels of management helps in avoiding such mistakes. Host country nationals also play a critical role in defining tastes and preferences of the local market. Pork is a popular product in China. It is also growing in popularity in the United States, Japan, and parts of Europe. However, it may be a big mistake if a firm can decide to open a pork processing plant in any of the MENA countries. The firm will not only fail to get the right market for the product in these countries, but it may be viewed unfavorably among the locals as a company trying to promote a culture that is unpopular among the locals. Avoiding such mistakes makes it necessary for a firm to hire locals at the top management level so that they can be involved in the processes of making critical decisions.

It may not be advisable to employ parent country nationals or third-country nationals for responsibilities that involve interacting with customers. It is important to make the locals feel that they belong to the company even though its headquarters may be in another country (Notarnicola, 2015). The targeted customers should feel that the presence of the firm in the country is having a positive impact on the locals through the creation of employment. That can only be achieved if they realize that employees who engage them are locals. When that happens, they will feel they have a responsibility to the firm of ensuring that it achieves economic success. The locals are also in a better position to convince customers to purchase the products of the company (Holz, 2016). Language barrier may sometimes be an issue when it comes to employing third-country or parent country nationals. The locals can easily communicate with customers in the languages common and popular in the local market. The above factors make it unavoidable for multinational companies to have a highly diversified workplace environment (Schellwies, 2015). As explained above, the diversity is not only limited to the race and language of employees. It may also exist in the form of the level of education of employees, age differences, and socio-political orientations. Irrespective of the magnitude and nature of the diversity, the most important thing is to ensure that a firm embraces the diversity and uses it as a means to achieve economic progress in the global market.

Problems with Diversity in the Workplace

Diversity in the workplace is important, but it also comes with a number of challenges that must be managed effectively to realize desired goals within an organization. Challenges often arise from the socio-cultural difference and the inability of a section of employees to rise above them. It is important to identify and discuss these challenges to come up with effective ways of addressing them. The following are the major challenges often associated with diversity in the workplace:


One of the biggest challenges associated with diversity is stereotyping. According to Mor-Barak (2014), people often develop a perception of others based on what they hear about them. It is common for an American to associate a Muslim immigrant from Iraq or Syria with terrorism. Terrorists, just like criminals in the United States, form a small fraction of the society. The place of birth, race, or religion that a person embraces may not necessarily be the defining factor for one to become a terrorist. Triana (2017) observes that the United States has witnessed cases where Americans, born and brought up in the country, become radicalized to the extent that they commit mass murders. It is a clear indication that for one to become a terrorist, the place of birth may not matter. However, it becomes a problem when a section of the employees fail to dispel the belief that Muslims from some of the troubled Middle East countries are terrorists.

Ozbilgin (2015) says that such negative beliefs create distrust and suspicion among employees. It creates a scenario where a section of the workforce is always on the offensive while the other section is always on the defensive. Those who view their colleagues as possible terrorists or sympathizers of terror groups may try to pressurize authorities to eliminate them because of the unfounded fear that they may be attacked. On the other hand, victims of such stereotypical attitudes will always be on the defensive. At first, they may try to change the mind of their colleagues (Schellwies, 2015). However, when they realize that may not be possible, they may embrace various defensive mechanisms to protect themselves from what they believe to be unfair persecution.

The racial difference has always been another ground for major stereotypical beliefs and attitudes. In the United States, the African Americans went through trying times when they were treated as second-class citizens. Although the country has come to appreciate diversity, Holz (2016) argues that some of the stereotypical attitudes leveled against people of color are still common in this country. The belief that all Blacks are criminal-minded is extremely demeaning and misleading. Whenever there is a loss of funds or destruction of property within a given firm, Blacks find themselves on defensive because of such negative perceptions. Notarnicola (2015) says that there is also a common belief that Jews are greedy and self-centered. Whenever a Jew puts in an extra effort in the workplace, colleagues may view him as a greedy individual keen on earning the attention of the top management for a possible promotion. In the recent past, a new type of stereotypical belief has emerged where most of the young employees born and brought up in the United States, irrespective of their race, are viewed as lazy and rude. Some employers may fear to work with such employees if they base their decisions on such baseless beliefs.

Gender is another area of where the society tends to embrace misleading socio-cultural beliefs. Men may indeed be physically stronger than women. However, it does not mean that women cannot undertake some responsibilities because of the perceived physical weakness. Using the physical differences between men and women as a basis to deny women opportunities in the workplace is a baseless excuse that is deeply rooted in stereotypical beliefs. Mor-Barak (2014) also warns of the misplaced perception that women are less intelligent than men. Systems and structures in the society have been favorable to men for so many years, making it easy for them to achieve academic and career success. However, it does not mean that men are mentally superior to women. It may be another excuse that is sometimes used to deny women opportunity to achieve career development.

According to Ozbilgin (2015), stereotyping is dangerous irrespective of the approach it takes. It is one of the common tools which are used by a section of the society to entrench the belief that some people are superior to others basically because of their race, gender, or social class. It is a dangerous weapon that destroys unity and integration within the workplace. It creates a rift among employees along various lines and makes teamwork impossibility within the workplace. Triana (2017) warns that when stereotyping is not closely controlled, it may result in hatred or xenophobic feelings. A section of employees may consider others as outsiders who lack a sense of belonging. Victims may view those who discriminate against them as oppressors who do not deserve their support. In such an environment, economic or social sabotage may be common. One group may plan and execute strategies that would ensure their colleagues fail in whatever they are doing. Knowing that failure of these colleagues would result in a direct failure of the firm, groups of employees may engage in counterproductive actions just to punish those who they believe are less deserving, hoping that they would be eliminated because of such mistakes.


Intolerance is another big issue that is associated with diversity in the workplace. Muslims have specific times that they have to pray at specific hours within the day. Even if they are in the workplace, they have to take some few hours to pray because of their religious beliefs. Failure to understand and appreciate this religious practice may create problems within an organization. Religious intolerance is common in various countries around the world. Holz (2016) notes that one may be attacked either physically or verbally because of the faith. A section of the western countries is slowly embracing the fact that people may have different sexual orientation. Although many people view heterosexuals to be normal, the society now appreciates that it is common to find people with different sexual orientations. However, many people are still intolerant of the idea that some men may prefer having a romantic relationship with fellow men.

The intolerance towards homosexuals is strong in most of the Arab countries where such practices are punishable by death. In the United States and parts of Europe, most of the gays and lesbians have come out openly to express their sexual orientation because of the tolerance that the society has embraced towards people of various sexual orientations. That is why top chief executives such as Tim Cook of Apple Inc. and Inga Beale of Lloyd’s of London among others have been open about their sexual orientation. However, such individuals may not easily work in countries such as Saudi Arabia, Iran, Iraq, or Egypt where many people loath the practice. They may easily become targets of physical or verbal attack.

Women are increasingly gaining prominence in the corporate world. However, Ozbilgin (2015) laments that intolerance towards women in senior managerial position is common in various companies around the world, including in Europe and the United States where significant steps have been made in promoting gender equity. A section of the society still embraces the perception that women do not deserve to compete with men in the corporate sphere. They view women as manipulative individuals who may use any means to outsmart their male colleagues to get a promotion. The negativity of these men makes them view women as unworthy competitors in the workplace environment. Mor-Barak (2014) argues that intolerance can also be witnessed with regard to the age difference in the workplace. The younger generation may avoid the elderly colleagues because of the perception that they are of less energy, slow to embrace emerging technologies, and unable to appreciate the modern culture. The intolerance may be so strong in the workplace that employees may form a group based on age.

Culture shock

Culture shock is another issue that often arises from diversity in the workplace, especially in multinational organizations. Although globalization has brought different people from various parts of the world closer than it has ever been, Triana (2017) observes that culture remains a unique defining factor in the background of a people. An American executive officer sent to work in Saudi Arabia may find it difficult adapting to the Saudi society because of the culture shock. For a long time, women in Saudi Arabia were not expected to drive cars. Cultural teachings also prohibit them from swimming, competing in sports, or trying on new clothes at the retail stores. In the past, the society demanded that visitors coming to the country had to observe some of these rules and regulations. Although some of them are just fading away, the society values these religious teachings.

A female executive from the United States, where women enjoy the same rights and responsibilities as men, may be shocked when she has to embrace a culture that is popular in Saudi Arabia. It may take some time before adapting to the local cultural practices. Similarly, it may be a culture shock for a Saudi national who has to work in the United Kingdom or Switzerland because the social beliefs and practices vary significantly. Some employees may succeed in overcoming the culture shock when they have to work in a different country. Others may fail to adjust to the local system (Schellwies, 2015). An American woman may consider the Saudi culture too oppressive and retrogressive to withstand. Such an employee may request the top managers to be granted a transfer. If her request is denied, she may consider resigning from the company and flying back home to lead a normal life. It means that desired skills and talents of such an employee may not be useful in such a country.

Ineffective communication

Diversity may give rise to ineffective communication. The problem with communication may arise from various fronts. First, language may be a barrier to effective communication in a highly diversified workplace environment. When an executive is transferred from the headquarters to an overseas branch, communicating with the locals may be an issue if he or she cannot speak in the local languages. In most of the cases, such an executive may rely on the deputies to relay the message to the junior employees. However, in some cases, it becomes important for the top executive to communicate directly with all employees. When language is a barrier, effective communication between the top management unit and the rest of the workforce may be affected. Mor-Barak (2014) also observes that in some cases the organizational culture may break down effective communication in an organization. Most of the companies in North America have embraced an open-door policy of communication. When an employee from the United States is transferred to China where communication has to pass through strict channels and systems, there may be a breakdown in effective communication. The new employee may find it difficult to follow laid rules and regulations about how to communicate with the senior managers (Notarnicola, 2015). Perceptions that an employee has towards the management unit may also affect how communication is passed from one department to another or from one level of management to the next. If the recipient of the information has a made-up opinion about the sender, then the message can easily be distorted based on the opinion of the employee.


Holz (2016) observes that rebellion is another major problem that is associated with diversity in the workplace. Junior employees may rebel towards the senior authorities on the ground of differences in opinion on how a given task should be undertaken or changes needed within a firm. One of the main issues that may bring about rebellion in the workplace is a situation where a younger generation of junior employees feels that the aging senior managers are failing to understand their needs. The problem of rebellion may also arise when a section of employees feel that they are forced to embrace a culture that goes against their religious beliefs and practices. When a top manager prohibits employees from attending daily prayers while at work, Muslims may feel targeted. They may express their dissatisfaction in many ways to demand their religious rights to be respected. A top manager who does not believe in the existence of Supreme God may not appreciate the need to spend some few hours praying daily. To such a manager, spending time praying is a waste of time that can be used constructively in addressing various tasks. On the other hand, a believer may be willing to sacrifice the comfort and security that comes with regular employment for the sake of faith.

People of the two extreme beliefs may not find it easy in defining a common ground that can foster a positive workplace environment. If they fail to agree on the common approach that should be taken to accommodate everyone, it is likely that employees may rebel, especially if they are forced to go against their faith. Sometimes employees may rebel because of a sudden change proposed by the top management unit of a firm. Such cases are common when young employees find themselves in top managerial positions where they have to head senior workers. The junior employee may propose a radical change, sometimes based on the emerging technologies. The aging workers may feel threatened by such sudden changes and may express their frustration in various ways. Any form of rebellion in the workplace, as Triana (2017) observes, is always counterproductive. It affects the ability of the employees to deliver results as would be expected. The go-slows and industrial actions may limit the capacity of an organization to achieve the set goals and objectives. That is why Holz (2016) strongly suggests that it is important for the management unit to find a way of managing diversity in the workplace to avoid possible rebellion.

Theoretical Framework

When examining diversity in the workplace environment among multinational companies, it is necessary to look at some of the relevant theories that may explain why some organizations succeed in embracing change while others do not. Some of the successful multinational corporations have learned how to embrace diversity while a few others are still struggling with this issue. McGregor’s Theory X and Y may help in explaining the phenomenon.

McGregor’s Theory X

The theory holds that people tend to be lazy and need close and strict supervision in a workplace environment (Parhizgar, 2013). It requires managers to come up with strict rules and regulations that must be followed by all employees and develop punitive measures against those who fail to follow them. In many cases, it gives senior managers absolute power over employees and leaves little room for negotiation because of the belief that employees are lazy. Mor-Barak (2014) warns that this theory can be dangerous when embraced in a diversified workplace. Sometimes the top manager may assume that the inability of employees to embrace a given work culture is because they are lazy and less corporative. Such a manager may be tempted to come up with punitive measures against such employees without letting them explain why they cannot embrace a given work culture. In such a combative environment, employees can rebel against the management, especially when they believe they are oppressed. This theory also limits the ability of employees of the same level of management to integrate and work as a unit. It promotes suspicions within the workplace (Schellwies, 2015). As such, it should be avoided at all costs.

McGregor’s Theory Y

The theory holds that employees can be self-motivated and can achieve great results if they are offered the right environment to do so (Notarnicola, 2015). The theory strongly supports the development of a workplace environment where employees can engage with the top managers with ease and share their ideas on how different tasks should be handled. It champions for a management approach where employees opinion and cultural practices are accommodated as long as they are not against the vision and mission of a firm (Parhizgar, 2013). This theory promotes trust, which starts with the top managers believing that junior employees can do the right thing even when they are not strictly supervised, and goes down to junior employees who are expected to embrace the same trust when engaging their colleagues at work. Most of the firms that have successfully embraced diversity understand the significance of this theory. It creates a platform where workers are not judged based on who they are or what they believe in but how they undertake their responsibilities and results they deliver to the firm (Notarnicola, 2015). Using this theory, the managers and fellow workers have to appreciate that every individual is unique in one way or the other. The uniqueness may be expressed in many ways. However, the most important thing is to find ways of using the diversity for the benefit of the firm. It allows employees to embrace their faiths and beliefs but in a way that does not affect their productivity or performance of their colleagues.

Ethical Issues

When conducting academic research, Triana (2017) notes that there are various ethical considerations that one needs to observe. The researcher was keen on observing all the relevant ethical concerns when collecting data in this research. The study relied on secondary sources of data. They included books, journal articles, and reliable online sources. It was necessary to ensure that the sources used in this study were reliable to enhance validity and reliability of the research. The school policies strongly discourage students from engaging in any form of academic malpractices, top of which is plagiarism. The researcher avoided any form of plagiarism. Information obtained from other sources was properly paraphrased, and sources indicated properly using American Psychological Association (APA) referencing method. Where necessary, the researcher used direct quotes, especially in some of the definitions. In such cases, quotation marks were used, and relevant in-text citation was indicated accordingly. All the sources used in the in-text were listed in the reference list in alphabetical order.

The researcher ensured that no one was directly involved in the collection, analysis of the secondary data, and writing of the report. When it was decided that data will not be obtained from primary sources, the need to engage other parties in the study was eliminated. The entire process of identifying the right materials for the study, reviewing the materials, and writing up the report was done by the researcher. The school library and online databases proved crucial in enabling the researcher to identify the right materials for the research. Mor-Barak (2014) warns against allowing personal bias or prejudice to play a role in the collection and reviewing of materials in academic research. The issue of diversity in the workplace and problems associated with it may be an emotive topic based on personal experiences or possible affiliations. However, it is necessary to ensure that one remains objective in the entire process to avoid cases where the study becomes so clouded by a personal judgment that it may be impossible to achieve desired goals. Personal feelings of the researcher did not influence this study in any way. The information presented in this document is based on the materials collected from books and articles that were used in the study. The researcher also ensured that the study was completed within the timeline set by the school.


Diversity in the workplace is unavoidable, especially for multinational corporations, and finding a way of addressing challenges associated with it is critical for the success of these organizations. The review of literature strongly suggests that diversity should be looked at as strength of a company that can enable it to operate in any market without facing major relationship issues with the local population. In this chapter, the researcher will look at benefits of diversity in the workplace, how to manage challenges associated with it, and leadership approach that is needed in a highly diversified workplace setting.

Benefits of Diversity in Workplace

Experts in human resource management strongly support the need to have a highly diversified workplace as the best means of addressing numerous challenges that companies often undergo. Holz (2016) says that it is not only the multinational corporations that need to embrace diversity but also other medium-sized and small firms that have over ten employees. Diversity is not just expressed in terms of racial differences of workers. It also entails other factors such as age, gender, socio-political representations, and many other demographical factors as discussed in the literature review. Before discussing ways of managing diversity in the workplace, it is necessary to discuss benefits that make it necessary for a company to embrace it. The following are the main benefits of diversity in the workplace.

Increased adaptability

One of the main benefits of diversity in the workplace is increased the adaptability of a firm. A highly diversified company may find it easy to adjust to various changes in the market. Ozbilgin (2015) observes that having a proper mix of young and old employees makes it easy to adapt to changing tastes and preferences in the market. The younger employees may help the firm to understand changes taking place among customers of their age and so will the aging employees. When change is technology-based, having a team of young and technology-savvy employees may be critical in ensuring that the entire workforce makes a seamless shift from the old methods to the emerging technology-based methods of undertaking various responsibilities. For multinational corporations which are still expanding to new markets, a diversified workforce is crucial in making successful market entries. Employees at a company’s headquarters may find it difficult to adapt to the culture in the new market. It may not be easy for them to understand how to handle customers in foreign markets in an effective manner. However, employing the locals eliminates the problem. It enhances the adaptability of the company in the new market. It makes it easy to embrace local cultures and practices necessary for the success of the firm.

Cross-cultural understanding

Mor-Barak (2014) says that multinational organizations that have achieved massive success in foreign markets have learned how to operate in different socio-cultural setting. How a firm promotes its products and brands in the market must be in line with cultural practices in the market. The product and product delivery methods must also be based on cultural practices. The Coca-Cola Company is one of the most successful multinational corporations in the global market. Its brand is considered the most valuable in the beverage market. The success is attributed to its ability to understand socio-cultural forces in the global market. The firm understands that the approach that it takes to advertise its products in the United States cannot succeed in Saudi Arabia. In Saudi Arabia, the culture is strict about the mode of dressing, the interaction between men and women, and the kind of language that people can use in public.

The cultural requirements must be reflected in promotional messages that the company uses to target its customers. The firm must be seen to respect the local culture in its product delivery methods. At Coca-Cola Company, that is made possible by having a highly diversified team of employees (Notarnicola, 2015). The firm has Saudi nationals heading the local branches. They understand the local culture and often define policies based on the expectations of the local community. The practice is embraced in India, China, Japan, European countries, and in Africa. It means that the company is dynamic in terms of understanding the local culture. It operates in the global market in a way that respects local cultural practices. The firm has also learnt how to appeal to people of different age group. The strategy has earned it massive popularity as a beverage brand of choice among many people across the world.

Broad range of products

In a highly competitive global market, companies are looking for ways and means of remaining sustainable. As new companies emerge in the same market to compete for the local market share, it becomes necessary to find ways of increasing revenues. Other than moving to new markets, Triana (2017) observes that one of the strategies growing in relevance is the development of new range of products. Apple Inc. started as a company that specializes in the manufacture of personal computers. However, the company’s most successful product in the market currently is iPhone. It also has a range of other products targeting different customers (Schellwies, 2015). The firm has learned the importance of having a diversified portfolio of products. Having a diversified workplace environment makes it easy for a firm to diversify its products in the market. Younger employees may help the firm to identify a new need among customers of the same age. They can discuss with the management how the company may come up with a new line of product that can meet the emerging need. The same case can be witnessed with the elderly employees within the firm. Holz (2016) observes that a diversified workplace environment facilitates creativity and innovativeness among employees. Having a team of highly creative employees is critical in the development of new products in the market. The diversity of the workplace environment is often reflected in the range of products that a company offers in the market.

Improved customer service

A highly diversified workforce improves the experience that customers have whenever they are served by a company. Andersen (2013) motes that customers tend to be more comfortable being served by people they can identify with. For instance, a female customer will feel comfortable being served by a woman. She may want to explain her need in a way that a woman can understand. What that is made possible the customer will be comfortable explaining the need in the best way possible, and it is more likely that the product will be delivered in a better way than in cases where the customer fears to express her desire. Such a customer will register high levels of satisfaction with the firm. In foreign markets, Mor-Barak (2014) advises that companies should be careful when delivering products to customers. Inability to understand the needs of the locals may result in dissatisfaction among customers. It is the reason why it is always recommended to have the locals handling customers. They know what may be thrilling to customers based on the local needs and preferences. They also know what to avoid when handling specific customers because of the current events or cultural practices.

Language diversity is also important when trying to enhance the satisfaction of customers in the market. A customer may find it necessary to call the company because of a product they need or something they had already purchased. For a company operating in the global market, it is common to find cases where the calling customers are speaking different languages. They expect to find a customer service unit that can understand his language. When a firm has a properly diversified workplace environment, language cannot be a barrier to effective communication with customers. The service delivery will be improved. Such a firm can easily attract and retain a large pool of loyal customers in the local and foreign markets.

How Multinational Companies Deal with Diversity-Related Challenges

According to Triana (2017), before a firm can consider making a move into the international market, it must understand the cultural consequences of such actions. The management of the company must understand the possible forces in the foreign market and how they differ from those in the local market. Glencore Plc is one of the leading companies in Switzerland. The mining company has branches in various countries outside the country. The firm has achieved massive success in the mining industry because of its ability to understand the forces both at the local and global market. It is important to look at how successful multinational organizations deal with diversity-related challenges. In this section, the paper will focus on how the challenges identified in the literature review are managed by leading multinational organizations.

Managing stereotypes

According to Ozbilgin (2015), stereotyping may have serious consequences such as litigation, loss of skilled employees, poor morale among workers, poor sales and customer relations, difficulty in recruiting highly talented employees, and diminishing productivity. Multinational companies have come up with ways of managing the problem of stereotyping. One of the most effective ways of managing stereotyping that is common among multinational corporations is the enactment of workplace policies that discourage the practice. Holz (2016) says that such policies should prohibit utterances and actions that demean people of a given race, religion, gender, age, or any demographical class. Individuals should be judged based on their actions and not gender or skin color. Such policies should be enforced properly by ensuring that those who break them are punished in various ways. Employees should know that their actions have consequences.

Training may be necessary for enhancing knowledge about diversity in the workplace. Some socio-cultural practices of a section of employees may be strange to their colleagues. To avoid rift along such cultural practices, the management can consider organizing cultural fairs where workers are allowed to express their cultural practices and explain to their fellow workers reasons why they sometimes behave in a given manner. The workplace environment should facilitate free discussion of cultural practices of different people. The generational and gender differences should also be addressed in such forums. In a training session, the younger employees should be made to appreciate the fact that the elderly workers may lack the agility that comes with the youthfulness of a person, but that does not limit their ability to embrace emerging trends and technologies. As such, negative generalization along the line of age should not arise.

Employees should be encouraged to look at factors that they have in common with their colleagues. In most of the cases, differences that exist may be negligible. It may be the skin color, gender, or socio-political beliefs. However, there may be a lot of factors that employees share. The management should always encourage employees to focus on these commonalities. The common factors may be the challenges they face in the workplace, the common goals of their organization, common socio-economic and political challenges, or any other factor that they may share. The more employees focus on these commonalities, the less they are likely to engage in stereotypical discussions or sentiments. At General Electric, various policies have been designed to ensure that any negative sentiment directed against an individual because of race, gender, religious beliefs, or political alignments is avoided as much as possible (Schellwies, 2015). These policies promote embracing of diversity within the firm in its global operations. Holz (2016) warns that when fighting stereotyping as a common problem in the workplace, care should be taken to ensure that coercion is not used. Although it is necessary to inform employees that their actions have consequences, the management should not force employees to work in formations they are not comfortable with because it may affect their productivity. They should be empowered to rise beyond petty beliefs that classify people based on their socio-cultural and economic backgrounds.

Dealing with intolerance

Intolerance is another major problem that is often brought about by diversity in the workplace. Successful multinational corporations have come up with ways of addressing this problem as a way of promoting an enabling workplace environment. According to Ozbilgin (2015), Johnson & Johnson is a major global pharmaceutical company that has over 127,000 employees in different countries around the world. The company has strict policies when it comes to gender and racial intolerance amongst the employees. The management has successfully created a culture where employees have to embrace their colleagues of different gender and age. Discriminatory acts based on the demographical factors are rarely tolerated at the company. The company requires its employees to treat clients with respect at all times irrespective of their age, race, or gender. The same respect that employees accord to the customers must be expressed within the company. As Triana (2017) notes, it is not easy for employees to treat customers respectably if they lack the same towards their colleagues. When racial or gender intolerance is common within a company, the same will be expressed when handling customers. However, when a culture of respect and tolerance is inculcated among employees, it will come out naturally when handling customers and other stakeholders that these employees interact with in various contexts.

Managing culture shock

Mor-Barak (2014) observes that sometimes employees may be genuinely shocked by the culture of people when they are transferred from one country to another. Cultural differences in the new environment may be so shocking that one may not be able to withstand it. For instance, the culture that prohibits women from driving cars may be so annoying and inconveniencing to an employee who has just moved from Switzerland to Saudi Arabia. Leading multinational companies such as General Electric have come up with effective ways of managing culture shock. First, such employees are often taken through training to enhance their understanding of the new culture. They may need to understand reasons that make it wrong for women to drive cars in that community. Sometimes reasons given may not be convincing because they are based on retrogressive cultural practices, as Holz (2016) notes. However, they can be convinced to embrace some of these practices as long as they do not affect their social life in a significant way. If a female executive from Switzerland has to work in Saudi Arabia, the firm may consider hiring a male driver to ensure that she can move with ease from one location to another. Regular interaction amongst employees may also help in managing the problem of culture shock. When employees from different social backgrounds interact, they may get to learn reasons why some people behave the way they do while they are at work.

Dealing with ineffective communication

Effective communication is critical in enabling a firm to achieve success in the market irrespective of the level of competition. The top management unit must be able to pass instructions to the junior employees on how to undertake different tasks. The junior employees should also be able to express their opinion to the top management unit within the firm. However, Triana (2017) argues that effective communication may be affected by various factors, especially in a diversified workplace environment. One of the ways of improving communication in a diversified workplace is to use established systems and structures. Employees should be aware of the approach that the management uses to communicate. Ozbilgin (2015) also suggests that for an organization that operates in a global market, information coming from the head office should be communicated in all the relevant languages. Instead of allowing overseas offices to translate the information, the top managers should make an effort to do the translation at the head office to avoid misinterpretation.

The message that is leaving the desk of the chief executive officer or the marketing director to all the branch offices should be the same but in different languages, as may be necessary. Mastercard is one of the leading global companies that have registered impressive performance in the financial sector. The top managers of the company highly value effective communication (Schellwies, 2015). The management often ensures that the message that comes from the head office is translated into all the relevant languages in a way that does not distort the information. Holz (2016) argues that effective communication can be promoted if a firm embraces open-door policy. Employees should feel free to visit senior managers to discuss issues that they feel are relevant to the progress of the company. Prejudice and negative perceptions may distort effective communication, and as such, they should be avoided at all costs.

Managing rebellion

A rebellion of employees against the management may take different forms. It may come in the form of go-slows, failing to go to work or demonstrations. On September 3, 2017, employees of McDonald’s in the United Kingdom went on strike to demonstrate their anger and frustration towards some of the policies that the company had embraced (Notarnicola, 2015). Any form of employee rebellion may have a devastating impact on the productivity and profitability of a company. Triana (2017) says that successful organizations have learned how to handle employees to eliminate possible rebellion. One of the best ways of managing rebellion is to ensure that employees are properly engaged, especially when making policy changes. Most of these rebellions are caused by misunderstanding and miscommunications. When employees are adequately informed, they will understand the relevance of embracing a new system and benefits that it may have to the employees and the firm. Effective engagement also ensures that there is a smooth transition from one system to another. According to Ozbilgin (2015), rebellion can be avoided by listening to concerns of employees and acting upon them as may be necessary.

Employees may complain about the salary, the pressure at work, the state of a workplace environment, and many other work-related problems. Mor-Barak (2014) argues that addressing these concerns in time may avert any negative reaction among workers. Sometimes the company may not have the financial capacity to increase salaries or address concerns of employees. However, when the top managers approach employees and explain the condition, the issue can be resolved. In such communications, a clear timeline should be given on when the issue will be addressed, and a proper justification stated as to why the concern cannot be resolved immediately. Employees should be made to appreciate the strength that is associated with a diversified workplace environment. The mutual respect among employees will help eliminate practices that may make a section of the workforce feel that they are oppressed or despised. Such policies also help in eliminating possible rebellion in a firm.

Managing Change in a Diversified Workplace Environment

Change management is one of the biggest concerns of multinational corporations. Holz (2016) believes that change is always undesirable to many stakeholders, but it is unavoidable. People fear change because they feel threatened. The fear that the emerging technologies may make their services unnecessary hence they may lose their jobs. Others feel that their skills and experiences may not be effective in a new environment. Some of these fears are valid, but it does not mean change can be avoided or postponed. Organizations operating in the global market often have to find a way of introducing change uniformly despite the diversity issues that it may face. Triana (2017) advises that a firm should implement change using Kurt Lewin’s Change Model shown below:

Kurt Lewin’s Model 
Figure 1: Kurt Lewin’s Model 

As shown in the above model, the change should be introduced systematically within an organization. It should not be a sudden process. The first stage should be the unfreezing process. At this stage, the management is expected to explain weaknesses of the current systems or structures that need to be changed. All stakeholders, especially employees should be involved in this process. They should be made to appreciate weaknesses of an issue that needs to be changed. They should also be involved in discussing the possible ways of addressing the problem. As Mor-Barak (2014) notes, employees are less likely to resist change if they feel they played a role in finding solutions to the current problems. The unfreezing process may also involve training of employees if that may be necessary. Employees may need some form of training to understand how they can work under the new system. This stage ensures that employees are properly prepared for the expected change.

The next stage is the introduction of change. In this stage, the new system or structures are introduced within a firm. Employees should be fully prepared for the change at this stage. When introduced, they should understand the new roles and how they should work with their colleagues to achieve the expected goals. Triana (2017) observes that it may be necessary to take them through some form of training if necessary. When implementing change, the management should ensure that everyone is actively involved in the process. That last stage, as shown in the above model is to unfreeze. It involves ensuring that change takes the right effect on the company. Any challenges encountered should be addressed through relevant structures within the firm.

According to Triana (2017), for multinational organizations, change may not come in an even manner. Environmental factors have a major impact on changes that a firm embraces. A new system that has just been introduced in Japan may not be relevant in South Africa. The infrastructural development and culture in South Africa may make the new system irrelevant. It means that when managing change, corporations operating in the global market should understand when and where it is necessary to introduce the new systems. Spending a lot of resources to introduce new systems only to realize that they cannot work based on the existing systems and structures may be frustrating and financially burdening to a firm.

Leadership in Diversity Management

Managing diversity in the workplace environment requires proper leadership within an organization. Given an opportunity, employees can embrace a negative culture in a highly diversified workplace environment. According to Ozbilgin (2015), people trusted with leadership positions should ensure that they inculcate a culture of tolerance and understanding of people who may have demographical differences. The following are some of the leadership approaches that may be relevant in an organizational setting that is highly diversified, especially in multinational corporations.

Authoritative leadership

According to Mor-Barak (2014), authoritative leadership style may not be the most popular leadership approach in the modern society. However, in some cases, it may be relevant to ensure that followers observe rules and regulations set by a firm. This form of leadership is important when trying to eliminate undesirable practices within a firm. Eliminating stereotypes and intolerance along socio-cultural lines may be challenging. Perpetrators may not understand the pain that victims often go through when they are associated with behavior or practices that they do not subscribe to just because of their race or religion. Triana (2017) argues that intolerance may also have serious consequences that may affect the productivity of a firm. Authoritative leadership style may be needed in eliminating these vices. An emphatic leader is needed to remind employees that every action they take has consequences. Issuing warning is one thing and taking appropriate action is another. An authoritative leader will take actions against those who break policies set within the firm. Taking firm actions against those who go against the set organizational culture will discourage employees from acts such as stereotyping. Holz (2016) says that authoritative leadership does not involve issuing commands without giving followers opportunities to express their views. It does not involve issuing of punishment at the slightest of the provocation. It only emphasizes the need to be strict in fighting negativities and practices that may have an undesirable impact within a firm.

Transformational leadership

It is one of the leadership styles which are increasingly becoming popular in the current workplace environment. It may be instrumental in promoting understanding among employees in a diversified workplace environment. Triana (2017) explains that a transformational leader challenges followers to move beyond their comfort zones. It is okay for one to be proud of her culture. However, one should also appreciate that others also have their culture that they take pride in at all times. The most important thing is to appreciate the existence of diversity and to avoid actions and utterances that may jeopardize harmony in the workplace. Transformational leadership encourages employees to focus on issues that promote unity and development within a firm. It makes it easy for employees to be objective in actions they take.

Conclusions and Recommendations

Diversity in the workplace environment comes with numerous benefits, but it also brings some challenges that a firm must address to achieve success in the current competitive business environment. In this study, the focus was to determine how multinational companies from an organizational point of view deal with problems that arise in connection with new diversity topics. Successful multinational corporations have learned how to take advantage of benefits associated with a diversified workforce. They know how to identify and address problems that may arise within their organizations as a result of having a diversified workforce. Problems such as stereotyping, intolerance, culture shock, ineffective communication, and rebellion are some of the common problems associated with diversity in the workplace. Stereotyping arises from unfounded beliefs that a group of people is likely to behave in a given manner because of their race, religion, level of education, and socio-economic background. Such generalization, when unchecked, may bring tension within an organization. Employees may fail to work as a unit because of the rift that is likely to be created by such generalization. Intolerance may arise in a workplace environment when issues such as stereotyping are not controlled effectively. It is common when an organization lacks proper leadership. Culture shock is common when employees have to work with colleagues who embrace a complete opposite of their socio-cultural and economic lifestyle for the first time. Ineffective communication and rebellion are the other challenges that are associated with a diversified workplace environment. The following are the recommendations on how these challenges can be addressed based on findings made on how successful multinational corporations deal with them:

  • Stereotyping should be eliminated through various means. One of the ways of eliminating it is to take employees through training so that they can understand and appreciate diversity in the workplace. Employees should also be allowed to interact freely with their colleagues.
  • Intolerance requires proper leadership. The study shows that authoritarian leadership may be necessary to ensure that employees know that their actions have consequences.
  • Culture shock can be addressed through seminars where employees are taken through training on why people in a given part of the world behave in a manner they do and how one can fit in that culture.
  • Ineffective communication can be addressed by eliminating all barriers. Psychological, physical, and language barriers should be eliminated to enhance effective communication.
  • Rebellion can be eliminated by having a workplace environment where views and needs of all stakeholders, especially employees, are addressed effectively and at the right time.


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