The Multicultural Organization

Executive Overview

Organizations are becoming increasingly diverse in terms of gender, race, ethnicity, and nationality. This diversity brings substantial potential benefits such as better decision making, greater creativity and innovation, and more successful marketing to different types of customers. But, increased cultural differences within a workforce also bring potential costs in higher turnover, interpersonal conflict, and communication breakdowns.

To capitalize on the benefits of diversity while minimizing the potential costs, leaders are being advised to oversee change processes toward creating "multicultural" organizations. What are the characteristics of such an organization and how do they differ from those of the past? What mechanisms are available to facilitate such a change?

This article addresses these questions. It also describes a model for understanding the required features of a multicultural organization and reviews tools that pioneering companies have found useful in changing organizations toward the multicultural model.

Article

As we begin the 1990s, a combination of workforce demographic trends and increasing globalization of business has placed the management of cultural differences on the agenda of most corporate leaders. Organizations' workforces will be increasingly heterogeneous on dimensions such as gender, race, ethnicity and nationality. Potential benefits of this diversity include better decision making, higher creativity and innovation, greater success in marketing to foreign and ethnic minority communities, and a better distribution of economic opportunity. Conversely, cultural differences can also increase costs through higher turnover rates, interpersonal conflict, and communication breakdowns.

To capitalize on the benefits and minimize the costs of worker diversity, organizations of the '90s must be quite different from the typical organization of the past. Specifically, consultants have advised organizations to become "multicultural."(1) The term refers to the degree to which an organization values cultural diversity and is willing to utilize and encourage it.(2)

Leaders are being charged to create the multicultural organization, but what does such an organization look like, and what are the specific ways in which it differs from the traditional organization? Further, what tools and techniques are available to assist organizations in making the transition from the old to the new?

This article addresses these questions. I have used an adaptation of the societal-integration model developed by Milton Gordon, as well as available information on the early experience of American organizations with managing...