1. Per our chapters, what are the advantages of managing cultural diversity in the workplace?
2. Now, consider a large, successful company such as Mcdonald's or Walmart. Both of these organizations are considered to have diverse workforces and already existing customer bases. Given this, should managers at companies such as these attend diversity training?
3. Lastly, discuss things as a leader to prepare to become a multicultural leader.

Reference:

The ethical and socially responsible goals of leaders and their organizations include providing adequately for members of the diverse work force. Ethical leaders should therefore feel compelled to use merit instead of favoritism or bias as a basis for making human resource decisions. A firm that embraces diversity is also behaving in a socially responsible manner. A leader, for example, who chose to hire five developmentally disabled, unemployed individuals, would be acting in a socially responsible manner. Hiring these people would transfer responsibility for their economic welfare from the state or private charity to the employer. (Some would argue that unless hiring these people is cost effective, the company is neglecting its responsibility to shareholders.)

According to research and opinion, managing for diversity also brings the firm a competitive advantage. Almost a decade ago, Patricia Harris, the Global Chief Diversity Officer of McDonald's Corporation, expressed the matter quite directly: "We began to diversify our operations when it became clear to us it was the best way to sell more hamburgers in minority communities."The advantages of cultural and demographic (different group membership) diversity are most likely to accrue when diversity is built into the firm's strategy. In addition, the chief executive of an organization should be the champion for valuing inclusion and must establish this perspective and associated actions for others throughout the organization.

Here we review evidence and opinion about the competitive advantage of demographic and cultural diversity.

Managing diversity well offers a marketing advantage.A representational work force facilitates the sale of products and services, and the need for such a workforce appears to be increasing. A major component of the marketing advantage of diversity is that a work force that matches the diversity of a company's customer base has an edge in appealing to those customers.

Another marketing advantage is that many people from culturally diverse groups prefer to buy from a company with a good reputation for managing diversity. Allstate Insurance Company, Inc. is well known for its diversity initiatives, and the company has become the nation's leading insurer of African-Americans and Latinos. Allstate leadership states that inclusive diversity is one of its core values.The large number of agents and customer service representatives from these two groups facilitates attracting and retaining a high percentage of African-Americans and Latinos as customers. State Farm is another example of a financial services company that promotes diversity as part of its business strategy.

The general picture is that cultural diversity can drive business development. By reflecting the demographics of the community companies become more desirable in the global marketplace. The networks of talented employees from culturally and demographically diverse groups enable the company to connect with various audiences and expand into new markets.For example, the many Latino employees at the Buick division of General Motors have helped increase the popularity of Buick cars among Latinos in the United States.

Companies with a favorable record in managing diversity are at a distinct advantage in recruiting and retaining talented people.Those companies with a favorable reputation for welcoming diversity attract the strongest job candidates among women and racial and ethnic minorities. Also, a company that does not welcome a diverse work force shrinks its supply of potential candidates. An organization that strives for diversity in recruiting simply has a larger talent pool in which to search for candidates. A telling example is that in recent years companies have chosen more executive leaders who are women or who are foreigners. When companies hire culturally diverse workers and provide them with all the tools, resources, and opportunities they need to succeed, those companies are more likely to display the full talents of their work force.

Heterogeneity in the work force may offer the company a creativity advantage, as well as improve its problem-solving and decision-making capability.Creative solutions to problems are more likely to be reached when a diverse group attacks a problem. Diversity specialist Joe Gerstandt presents a chemical analogy: By themselves, atoms of oxygen, carbon, and hydrogen are tasteless. When combined, however, they create sugar. Gerstandt believes that innovation takes place at the intersection of differences, even if getting there may bring some tensions at first.Research evidence suggests that working with people who are different from you may challenge your brain to overcome its traditional thinking and sharpen its performance. Another possibility is that diverse teams are more likely to reexamine facts frequently and remain objective.

Diversity and inclusion programs help local economies thereby boosting social responsibility.Many large companies take the diversity initiative of purchasing from local, minority, and female suppliers. The substantial purchases aid the local economy in terms of the flow of money as well as employment. The Macy's Supplier Diversity Program is a corporate initiative aimed at fostering the promotion, growth, and development of minority- and women-owned businesses. Company leadership at the 148-year-old retailer perceives the program as a solid business investment. By supporting local and regional business enterprises, Macy's believes it can strengthen itself and expand while at the same time contribute to the financial growth of the community it serves.

Enhancement of team performance.Similar to the creativity advantage, cultural diversity can enhance team performance, often because diverse backgrounds are associated with diverse information, knowledge, and perspectives that can be used to solve problems. Two studies conducted with students at a Dutch business school working on business simulations tasks provide some insight into when the conditions under which diversity enhances team performance. The general finding was that cultural diversity is more likely to enhance team performance when team members have a high learning approach orientation to attaining goals. (Refer back toChapter 10.) In contrast, when team members are oriented toward the avoidance of poor performance, cultural diversity has no particular impact on team performance.An interpretation here is that when the culturally diverse teammates are more concerned about developing new skills, they will perform better as a group than when they attempt to prevent looking bad.

The potential of diversity to enhance team performance has another moderating factor. The leader of the diverse group must help members collaborate; otherwise, the advantages of diverse perspectives will be lost.

The accompanying Leader in Action insert describes an executive in the tourism field who believes strongly in the business case for diversity.

Leader in ActionCarnival Corporation Capitalizes on Managers from Diverse Backgrounds to Reignite Growth

Arnold W. Donald, president & chief executive officer (CEO), Carnival Corporation & plc, says that diversity is a business imperative. "The key to innovation is diversity of thinking." He believes that having people from different backgrounds and different cultural experiences who are focused on a common objectives are much more likely to achieve innovation that a homogenous group. Furthermore, the same diversity of thinking is a powerful advantage.

Donald was the former chairman of the chemical company Merisant, and top executive at the weed killer division of Monsanto. He became president and CEO at Carnival Corporation in 2013, after having served on the board for thirteen years. When Donald became CEO, Carnival Corporation was reeling from several crises, including a deadly ship crash and a ship idled in the ocean in an unsanitary condition. One of his major goals was to increase the percentage of North Americans who cruise each year, which has stood at four percent for many years.

Among the better known Carnival Corporation brands are Carnival, Cunard, Holland American Line, and Princess Cruises. Each operating brands has its own unique culture based on its headquarters location, guests served, and the diversity of employees and the leaders. Arnold emphasizes that maintaining a diverse workforce promotes an open, tolerant, and positive work environment the talents and strengths of everyone can be put into play. The company works to attract, motivate, develop, and retain the best talent from the diversity within the world. Carnival leadership believes that the company's ability to be competitive and to thrive globally depends on a diverse workforce.

Donald says that "A highly talented team, with a process to work together, that is diverse will out-innovate a homogeneous team 99.9 percent of the time." In addition to being the right thing to do, diversity leads to better shareholder returns, and helps sustain business success." Jan Schwarz, president of Princess, says "Arnold is a champion of diversity and holds firm in the belief that diversity adds depth and breadth to thinking about challenges and opportunities."

The most dramatic way in which Carnival Corporation capitalizes on thought diversity is by choosing different types of people to be in charge of each of its nine brands (cruise lines). Arnold himself triggered diversity in the company leadership by being the first African-American CEO in an industry that had generally been dominated by white corporate leaders.

During his first two years at the helm Donald replaced seven of the nine cruise line heads. Four are now women, one is African-American, and one gay, and major change from a business that was once an offshoot of the European made-dominated shipping industry. Donald says that his strategy is to create an environment where differing opinions are heard and taken seriously, leading to diversity in thinking. Several of the cruise line presidents have been chosen from outside the cruise industry. For example, Orlando Ashford, the president of the Holland American line had previously been running a compensation consulting business and had never taken a cruise.

Mark Conroy, the president of a former competitor, Regent Seven Seas Cruises, commented about Donald's diverse recruiting: "You had people who grew up in the business, and they're always doing the same thing. People from the outside look at things differently." Another aspect Donald's approach to diversity is to offer special promotions to attract more young guests, rather than focusing so heavily on older people. One approach is to offer lectures on board on such topics as wine, and provide information about the locations where the ships stop.

Arnold obtained his BA from Carleton College, a BS in mechanical engineering from Washington University, and an MBA from the University of Chicago.

Source:Original story created from facts and observations in the following sources: Melanie Trottman, "Cruise Lines Woo the Never-Cruisers,"The Wall Street Journal, February 21, 2017, p. R4; Christopher Palmeri, "Carnival Rocks the Boat,"Bloomberg Businessweek, November 16-22, 2015, pp. 22-23; Charisse Jones, "Carnival CEO Steers Cruise Giant in New Directions,"USA Today(www.usatoday.com), January 22, 2015, pp. 1-4; "Sustainable Workforce,"Carnival Corporation & PFC(www.carnivalcorp.com), July 29, 2016, pp. 1-5; "Diversity & Inclusion,"Carnival Corporation & PLC(www.carnivalcorp.com), July 29, 2016, pp. 1-8.

To raise your level of awareness about how to capitalize on the potential advantages of diversity, doLeadership Skill-Building Exercise 14-1, which illustrates that diversity skills are another important subset of interpersonal skills associated with leadership.

Leadership Skill-Building Exercise14-1Pinpointing a Diversity Advantage

Much has been written and talked about of the advantage that a culturally diverse workforce can bring to a company, school, or government agency. Organize into teams of about five, or conduct this exercise on your own. Each person outside of class attempts to find one advantage that stemmed to an organization from having a culturally diverse workforce. Instead of relying on written information, contact one or two people in your network. Speak to your contact person or persons by phone, text, or conduct a video interview. Ask the person to identify any workplace advantage to diversity that he or she has observed. Record the evidence you have collected, and share with group members if you formed a group. The skill builder in this exercise is that you might raise your awareness level of the advantages of a culturally diverse workforce. You might also become aware of a potential problem to diversity that you would have to manage as a leader.