Cultural Diversity, why does it matter?

“Cultural intelligence” is a value that can be considered a competitive advantage at the moment of making businesses, exporting merchandise, or establishing abroad. Businesses that succeed internationally are conformed by people that are able to identify different cultural characteristics and manage them correctly. For example, to know how to greet an important potential client from Japan, or to adapt to the costumes when invited to a dinner by a CEO from a company in the Middle-East.

But not only is it necessary to understand the cultural characteristics of each market; it is also necessary to know how to lead complex teams of various nationalities within a multinational company. This issue is addressed by companies through diversity management, which can be defined as the strategic alignment of a heterogeneous group to include and value each employee equally on the basis of their diverse characteristics, with the purpose of enhancing organizational justice and achieving better business outcomes.

Multinational companies are increasingly venturing in distant markets abroad, where there are not only language barriers but also different traditions, beliefs, rules and values. Managing correctly the diversity within a company will generate notorious competitive advantages: more attraction and talent retention, detection of new business opportunities and commitment from the employees, among others. Furthermore, having multicultural teams allows to increase the bonds between clients and the community. 

It also has a highly positive effect in sales and profits, as employees can bring together their different experiences, talents and various skill sets to come up with creative solutions, whereas another group made up of same or similar backgrounds may decide to solve the problem the same way they always have.  In their daily functioning, organization leading in cultural diversity management are implementing assistance programs to their expat executives and employees, language courses, rotations in work positions abroad, and formation of global exchanges.

Trans-Atlantic Virtual Exchange and Collaboration

In the context of cultural diversity and its increasing importance in the international framework, Hochschule Fresenius of Applied Sciences and Adelphi University have come together in a joint student project in the areas of Business Ethics and Organizational Behavior, in which students were assigned in mixed teams with representatives from both universities.

The research question is „How should international companies navigate the challenge of cultural environments?“

Project teams must choose an international company with presence in the USA and Germany and analyze the company in relation to the fundamental question. The final deliverable is a 10-15-minute video presentation in which each team member participates. The final videos will be presented during a virtual conference in March 2021, where the winning team will win a trip to either New York or Cologne in Summer 2021. Some of the companies the teams have chosen are Starbucks, McDonalds, Nike, Google, among others. They have chosen different areas of focus, such as Social Responsibility, Cultural Competence, Data Privacy, Advertising Laws, or Legal frameworks regarding working conditions.

The joint project has the purpose of bringing students from different backgrounds to work together and challenge themselves to collaborate, share opinions and experiences from their own perspective. The intercultural exchange that occurs reveals similarities and differences that the students might or might not have been aware of, and enriches the perception outside their cultural bounds.

I see a lot of (cultural) differences, but mainly in advertising laws and data privacy, which is what we are looking at in our project.

Alexandra Lombino, Adelphi University

In the USA we don‘t use WhatsApp, it died long ago when I was in Middle school, so when our fellow students from Germany asked us to download it to communicate, I found it weird, afterwards I found out it was actually very useful.

John Nightingale, Adelphi University

Everyone has different point of views about different topics and it has worked out super well, even if it is online, it feels like we were four people in the same room.

Robin Inhof, Hochschule Fresenius

These kind of collaborations like the TAVEC Project encourage students to face multicultural environments, get used to working in diverse groups of people, celebrate their differences, and make the best out of them to reach their goals and break paradigms.


LudwigCultural Diversity, why does it matter?