In some multicultural organizations, nationalist feelings or anti-foreigner prejudice – or both – are at the root of various kinds of discrimination. For instance, minority employees may be excluded from the decision-making process because they are not members of the boss’s inner circle. The result of this kind of discrimination is that sub-optimal decisions are sometimes taken. That turned out to be the case at a cereals-processing company in a Baltic republic.

The company’s workforce comprised both Russian and local employees. When a two-man committee, consisting of the general manager and a fellow-Latvian, was set up to select capital investment proposals for funding, the two managers felt they knew instinctively which were the most urgent projects were. And sometimes they supported their gut-feeling with a rough payback calculation.
So the managers were surprised when the financial controller, a Russian, complained that the selection procedure for investment projects needed to be refined, and that he thought it was essential that more managers should participate in the process.

1 Was the financial controller right? Why should the capital project selection process be refined, and by what means?
2 Should more managers be involved in the selection process? In what other ways could the process be improved?
3 What effect would improved project selection procedures have on the capital investment programme?