Cultural diversity, is it a performance factor?

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Globalization has led companies to start thinking about cultural diversity and the various questions related to it. Will it prevent cohesion? Will it drastically change existing processes? On a brighter note, could it eventually create wealth and new opportunities?

There are two main factors which could explain the origins of cultural diversity in companies. The first one is the increased mobility of people, due to better means of communication and transport. The second one is the constantly changing and competitive environment. When it comes to competition, many companies are willing to favor the skills of their potential recruits over their nationalities. The French company L’Oreal is well acquainted with this trend. In 2002, they hired 1594 management-level employees from 71 different countries.

Difficulties when running a multicultural company

Cultural diversity is often part of a company strategy, involving all actors inside the company. However, it can also translate into cultural differences and strong heterogeneity. Culture or in that specific case, corporate culture, is the way problems are tackled. Most of us have heard at least once the saying: “We always do it that way”. Therefore, it might sometimes be tricky to understand these differences but as a general rule, the following aspects refer quite pertinently to them:

  1. Visible elements (Clothes, language, food)
  2. Social norms (Gender equality, seniority…)
  3. Unconscious rules that refer to the company’s history or events that have shaped people or their behavior)The writers Early and Mosakowski have found in 2004 that people possessing a high cultural quotient work more effectively in multicultural teams. This cultural quotient is defined as the ability for someone to interpret ambiguous and unfamiliar behaviors of a foreigner in the same way as they would for someone from their own country.

The challenge for Human Resources employees

Every country has its own culture and practices, especially when it comes to the relationship with hierarchy, the means of communication, or motivational levers. Therefore, a human resource officer, in the context of cultural diversity, will have to take into account the standards of every worker if he wants to have an efficient human resource policy. For instance, if we consider employee reward and recognition systems, it has been found that not everyone values money. In certain countries, for example Sweden, family moments and leisure activities matter more than financial compensations. In that case, the human resource executive will have to choose compensatory rest instead of premiums.

Cultural diversity, a powerful asset for companies

Despite the difficulties related to cultural diversity, many companies tend to promote this concept by integrating it into their corporate culture, through diversity charters. These charters are often displayed on the official websites of these companies. Is it a marketing buzz or a real interest for cultural diversity?

Beyond the fact that it is often used to comply with corporate social responsibility requirements, cultural diversity is a real catalyst for innovation. It has been found that a heterogeneous group will always be more creative than a homogeneous group where all members think alike.

In other words, cultural diversity forces companies to rework the way they operate and to find new ways of thinking and embracing this new diversity. Therefore companies have to innovate because their system and their habits are challenged.

If listening more and accepting everyone’s uniqueness leads to increased productivity, what are we waiting for to change the way we work and conduct business?

Sources:,,, loré


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