Think about Hilton Worldwide, a multinational hospitality company with its headquarters in Virginia in the U.S. It’s the largest hotel chain in the world, with more than 4,000 properties in over 100 countries and more than 160,000 employees. Its efforts to foster diversity and inclusion throughout the company, as well as to promote brand values and leverage team members, guests, suppliers, partners and owners, have received numerous international awards. So is diversity – cultural or otherwise – key for business success for the Hilton chain and other companies?
For many years now, the hospitality industry has relied upon a culturally-diverse workforce, with both management and employees coming from a variety of national and cultural backgrounds. Against this backdrop, companies have had to tackle some serious questions: how can they ensure that all employees are treated fairly regardless of their different cultural backgrounds; how can they maximize the contribution of every member in diverse teams; and how can they ensure that employees in a diverse workforce are able to work together harmoniously to achieve common goals?
While few scholars suggest that being in a multicultural group affects performance negatively, most studies show that multiculturalism has a positive impact on group performance. This is mainly thanks to strong coordination and communication.
Individuals in multicultural groups are more likely to adjust and adapt their personal and cultural values in order to create and develop a common organizational culture.
In addition, some of the benefits for organizations are that they can be more innovative and competitive, and can promote the transfer of knowledge. Such organizations also become more attractive to minority customers and experience better talent recruitment and retention, plus are able to reduce labor costs. This is possible thanks to the development of partnerships with local communities and minority-owned vendors, which are able to improve on quality while cutting costs.
Nevertheless, experts in the field of work organization urge caution, as growing concerns over cultural differences in the workplace are surfacing. For example, in more group-oriented or collectivist cultures, working in a highly individualistic environment (e.g., in the U.S. or Australia) may be more likely to result in multicultural firms failing due to communication challenges (e.g., language) and discrimination issues. Therefore cultural diversity needs to be managed effectively. Fortunately, a myriad of articles and books have been published with the aim of exploring the opportunities and benefits of cultural diversity such as knowledge transfer, innovation, and competitiveness.
To return to our example of the Hilton Worldwide chain, the cultural challenges are great – as there is plenty of room for misunderstandings and conflict between expat and local members of staff – but the company provides training through its Hilton Worldwide University to reduce cultural differences and ensure that one culture – that of the corporation – is predominant. Plus, the Hilton has adopted an employee relationship management system to help managers break through cultural barriers and reap the benefits of cultural diversity. For instance, the company creates programs that increase awareness of cultural diversity to promote a more positive attitude towards differences among diverse groups. The hotel chain sets goals, evaluates performance, provides incentive plans, celebrates different religious or traditional holidays of minority employees in the workplace, helps local employees improve their language skills, and encourages family members of minority employees to get involved in company activities, such as company outings.
All these initiatives aim to increase work satisfaction and commitment, as well as reduce staff turnover. The ability of employees to communicate across cultures and understand the needs of a diverse customer base can give their organizations a competitive edge over firms which are not so sensitive to cultural issues.
In short, as a result of globalization and cultural diversity, firms face difficulties in terms of bringing teams and groups of individuals together. On the one hand, homogenous groups already share common attributes, which – in theory at least – should enable more efficient communications between members. By having similar opinions and values, homogenous groups tend to have a similar approach in dealing with a problem, hence reducing the potential for conflict. On the other hand, a multicultural group can benefit from the generation of new ideas, aided and abetted by cultural diversity.
Furthermore, individuals from diverse cultural backgrounds can learn from each other, as we witness every day here at EHL where more than 100 nationalities are represented among the student body.