Cultural Diversity And Its Impact In Business

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Question :

HI3042 Cross-Cultural Management and Communication


Literature Review:

 The individual assignment for this subject consists of an in-depth literature review of a specific topic which largely fall into the areas of "Culture and Business", "Culture and MNCs", "Culture and Communication".

Literature Topic Selection: 

A formal literature review/critique of the following Journal article on “Culture and Business”: Bird, A. and Mendenhall, M.E., 2016. From cross-cultural management to global leadership: Evolution and adaptation. Journal of World Business.


  • Identify evidence that the author has provided in the article to justify their argument (both for and against).
  • Perform additional external academic research to find other references and sources that support or detract from the overall hypothesis in the article. 
  • In your conclusion whether you agree or disagree with the author’s point of view and provide a summary of the reasons or justification to support your case. 
  • Provide a list of at least 5 good quality academic research articles and references that you have used in your analysis.
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Answer :



The skill to communicate freely, effectively and multi-culturally cannot be undermined by in today’s modern global business marketplace. It is of no secret that today’s workstation is growing rapidly and becoming vast as the environment surrounding the business expands to include numerous locations of geographic importance and span around different cultures (Johnson, 2016). However, what can be difficult is to understand the way of communicating effectively with people who speak another language, or who rely on different means to reach a similar objective. Culture is illustrated by the acceptable values, norms, and traditional behaviour of a class of people. However, culture also faces evolution over a period of time. The article is discussed on the neuroscience and human development. The culture of each country has its own set of values, activities and believes. If described in different words, culture can be defined as an evolving set of collective beliefs, values, and attitudes.

Culture has an influence on the strategic direction of business and is an essential key piece in business. Culture affects decisions, managements, and all business related functions from production to accounting. It has been identified that the neuroscience and the human development is dependable on each other. Though the various authors have put their views on the evidence. Business culture has its own unique set of dimension that includes getting off on the right foot, negotiation, meetings, social media use, formalities, internships and work placements and other elements. With the help of the latest modern technology, the Internet has opened up its arsenal of new opportunities and marketplaces that allow people to promote their businesses to whole new horizons and cultures. Communication involving cross culture is progressively the new standard now that it can be as easy to work with people face-to-face as it is to work remotely (Knoke, 2018).

Literature Review

Business culture is inter-connected with ethics, etiquette, behaviour and more. An organisation’s visions, values, beliefs, working style and habits will be enclosed by a business culture. Weller (2018) has depicted that neuroscience is the study which refers to the nervous system in the body. Thus it depends on the human development. If an individual gets nervous on the different matter then the person could not be able to improve. Thus the matter is adopted by various companies. As per the view of Stahl  and Tung (2015), a leader could be able to overcome the matter of the frustration and tension.  the One of the most significant business topics of 2018 is culture. HR leaders and CEO’s currently are acknowledging that culture drives people’s innovation, behaviour, and customer service. Many of these people are of the belief that culture is a potential tool which will give them a competitive edge over others. Leading companies are using data and behavioural information to manage and influence their culture knowing that leadership behaviour and reward systems directly impact organizational performance, customer service, employee engagement, and retention.

Culture and business is relying upon each other. It is responsible for bringing together the explicit and implicit reward systems that provides the definition of how an organization works by applying different practices, no matter what a business strategy, corporate mission statement or an organizational chart may say. A surprising number of corporations—over 50 percent in this year’s survey—have been recently attempting to change their respective culture in retort to shifting increased competition and talent markets. In this regard,Apetreiet al., (2015) has depicted that if the person is got tense due to several reason then the business culture might decrease. The leader should identify the issues and need to solve the problem by motivating and inspiring the person.

Great companies deliberately manage and cultivate their culture, turning it into a competitive advantage in the marketplace in an age in which bad news travels immediately and an organization’s culture is both directly tied to its employment brand and is transparent in nature. But, Beugelsdijket al., (2015) has argued on that. As per his views, the business and the culture does depend on the neuroscience. If the problem arises from the work place, then the leader should rectify the problem which is not related to the neuroscience. People sometimes wonder why certain corporations hire great professional engineers, generate steady growth, and deliver endless innovations, while others always seem to be reinventing themselves. Culture is a large part of the answer.

The importance of culture is readily apparent when things go south. When two large corporations joined last year, it became imminent that one corporation had a culture of “low cost” while the other had a culture of “quality service.” Employees received varied signals for months until the new management team finally took the time to patiently redefine and diagnose many business processes throughout the company.

Given the consequences of issues regarding culture and significance of culture, many companies are actively defining culture and issuing culture as “manifestos.”The cultural presentation led by the Netflix which were often used as an example has been downloaded more than 12 million times since 2009.The presentation distinctly narrates a culture that adjoins great expectations with an engaging employee experience: Magnanimous corporate perks such as flexible work schedules, limited supervision and unlimited vacation balance a strong focus on results with freedom and appreciation for the expected achievement.

After the 2008 financial crisis, the financial services industry is still restoring its brand and is sharply focusing on culture. In this regard, Hair Iet al., (2015) stated that one organization is using a variety of initiatives to help employees understand “how the bank does business,” including offering speaker series on topics such as customer satisfaction, maintaining regulatory standards and compensation packages. Citigroup has an entire assembly focused and ready on culture and ethics and has administered a series of web-based videos presenting real workplace moral dilemmas. But on the contrary, Williams and Vorley (2015) argued that there are number of workers are working in the organization, but the leader should manage the various issues come from the work. Bank of America is steadying its focus on its corporate culture transformation on cheering its employees to escalate and report concerns or issues, as well as including a risk into their recent training. Wells Fargo is expanding its efforts to collect employee survey feedback to get a better hold of current potential areas and trends of frailty in its culture. If the leader does not understand the problem then the person could be able to improve his workers at the certain time. Therefore, the changes in the individual are needed for developing the culture as well as the business.

An up to date industry of culture assessment tools has transpired which enables corporations to identify their culture using a variety of well-established models. Still not withstanding the ubiquity of these tools, fewer than 12 percent of corporations believe they truly understand their culture. That’s where HR truly shines. HR’s role is to improve the ability to shape and curate culture actively while businesses try to improve and understand their culture. An organization’s potential to understand and pull the levers of culture change can be strengthened and refined. In both the efforts, HR has a natural role to play.

As performance become more dispensed and move to a structure of network of teams, culture serves to join people together and helps them collaborate and communicate with each other. If managed well, culture can ensure business consistency and drive execution around the world. HR has an opportunity to assume the role of, communicator, monitor and champion of culture across, and even outside, the organization. When culture is transparently outlined, it defines who gets promoted, who the company hires, and what behaviours will be rewarded with promotion or compensation,

Critically Analysis with the article:

For a corporation to succeed and stand out in today’s competitive market, the thing it requires the most is HR and the variation between them. The ethnicities and cultural differences between them allow a bunch of ideas to root out of them and work wonders for the corporation. However as there are bunch of pros to cultural diversity in a workplace, there are also some cons to it.

                                                                              Higher Morale

When diversity is well managed, and employees are prone to cross-cultural diversity and addition of training, the outcome is that all individuals feel recognised and deemed important no matter their cultural differences. Broutherset al., (2016) argued that providing employees important opportunities to work with other people who bring different views and skills to the workbench helps them recognize that everyone is significant for their own different reasons. The notion feeling valued improves the morale of each and every worker and promotes positivity in the office.

Different Perspectives

When people with various cultures and background work together, they are revealed to different ideologies and viewpoints. It has been critically reviewed by Johnson (2016) that this helps people become habitual to hearing and sharing their different panorama and presenting their ideas. A wide arsenal of resolutions to the work bench are brought about which are based upon different schools of though and experiences by allowing culturally diverse employees to brainstorm, With more ideas to choose from, the chances of finding the best possible final solution is improved.

Global Impact

In a globalized world economy which is increasing day by day, personnel that are culturally varied can help corporations expand their business to a global market. The ability to communicate efficiently in distinct parts of the world is a crucial benefit, as well as understanding how to create relationships and knowing the cultural nuances and differences in partaking business in foreign countries. With a workforce that identifies these concepts, one creates the option to effectively develop ones business in a global market.

Community Relations

With a drift towards variegation, many communities around the world are becoming culturally diverse increasingly day by day. It is important that corporation identify this and impersonate the communities that they discharge their services to. For example, corporations need to be able to understand customer’s needs and communicate efficiently with them no matter the customer’s culture or language. Weller (2018) argued that having individual on duty that has the experience, skills, and background to do so are crucial to an organization. Customers and communities also favor to participate with companies that engage people who are similar to them. For this reason, hiring and managing employees with diverse cultures is an advantage in a competitive market space.

For these reasons and more, a culturally diverse workforce is considered to be one of the greatest assets one business can own. Although workplace diversity comes with some confrontations, the advantages more than outweigh the labour one may encounter, especially with the use of proper management methods.

Causes of Cultural Barriers

Language: Billions of people exist in the world that do not understand English or cannot communicate in English in a proper manner. Inability to speak properly is bound to cause different misunderstandings and as a result forms a barrier to communication. Therefore, the leaders should observe the different staffs very properly that whether they are facing any problem which might affect the business and culture. Various cultures have evolved their own language which is a part of their inheritance. People are more comfortable communicating in their own language than having to work hard to learn a new language.

Stereotypes and Prejudices: Stereotyping is a method of creation of an impression of a whole culture or a group, extrapolating all individuals belonging to the same culture as classifying people accordingly and having alike characteristics. Stahl and Tung (2015) discussed that it is a belief about a definite category and is mostly negative in nature. Stereotyping can be done on the basis of many things like, gender, nationality, religion, race, age, ethnicity, etc. An example of a positive stereotype is that Asian students are good at Math. But, there also exists cultural stereotype of all people who follow a specific creed as being violent like Islam and is a negative stereotyping. Negative stereotyping is known to create a prejudice which provokes judgmental attitudes. People portray those cultures as evil and treat the people following the religion badly. Media, which is a tool of mass communication promotes stereotypes and prejudices and creates more communication barriers.

Discussion and understanding

To sum it up flawlessly, comprehending various cultural backgrounds is advantageous for both the external and internal stakeholders. Promotion of diversity and implementing policies to support it will naturally create a positive workplace filled with culture. There already exists a stack of research about why workplace culture is so important, the first step understands why.Being able to overcoming language barriers and understand cultural differences are some of the deliberation individuals should have when dealing with business with people of different cultures. Foreign business deals not only cross borders, they also cross cultures. Culture greatly influences the way how people communicate, behave, and think. It also influences the sorts of transactions they make and the way they arrange them. Sometimes business deals are lost due to the fact that the parties involved did not take the time to learn about their each other’s cultures prior to interacting.


Multi-Cultural business dealings are one of the most important part of a professional’s life. One should be aware of the basic rules of multi-cultural dealings while meeting new people and dealing with clients, then you are most likely to make many errors that might be seemingly guilt-free or unknown to one, but could be easily misinterpreted as offensive and deliberate by the other person listening. To understand a country’s culture is a sign of respect. It also helps to boost effective communication which serves as a vital factor in success of a business. Developing an appreciation for another is not a herculean task and can be overcome easily.