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CULTURAL DIVERSITY AS A MANAGEMENT TOOL TO ENHANCE TEAM PERFORMANCE
© Golyakova O.V.*, Tolkacheva I.N.*
Higher School of Economics - Nizhny Novgorod
The results of researches about using cultural diversity for changing the effectiveness of team-work are still quite controversial. Empirical studies show statistically reliable but often opposite dates. Nowadays, due to globalization diversity is not only a challenge for international enterprises, but domestic firms also face with global competition in their local market, and have to deal with different cultures. So companies have to learn how to manage diversity. This article aims at discussing how cultural diversity affects the team performance. The presence of different cultures does not automatically imply neither positive nor negative outcomes; cultural diversity can be a double-edged sword. It is duty of the organizations and its management should coordinate the endeavors and maximize the cultural diversity benefits for their companies.
First of all, this article focus on the conflicts and the problems related to low team cohesiveness. The distinctions among group members and the risk of lack cohesiveness often lead to misunderstandings and decline performance of the group. Subsequently, the research highlights the positive aspects arising from multicultural environments, especially the effects on creativity and innovation, and the prevention of groupthink. Lastly, the article lists some factors that management can use to enhance team performance, in particular: the goal orientation and the level of heterogeneity. The research ends by a review of diversity of management and training issues, and the related additional costs.
Key words: cultural diversity, team performance, team cohesiveness, group thinking, training diversity, diversity management.
As to hindering performance cultural heterogeneous teams may have negative effects in regards to performances. In the following section we will discuss how cultural diversity inhibits team performance and what is the nature of conflicts in cultural diverse teams.
Firstly, conflicts may result due to linguistic differences and inhibit team performance badly. The reason is that team members belonging to a similar subgroup are more likely to converse in their mother language during discussion. However the use of a language specific to an individual subgroup may exclude team members from contributing to discussion and divide the teams. Furthermore native speakers are more likely to dominate during discussions. This may lead to one-
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sided outcome and for this reason it hinders performance [1, p. 241]. Another influential factor is differences in communication styles. Individuals from different cultural backgrounds usually vary in terms of directness, formality, use of silence, non-verbal signals and the levels of information shared. Authors describe "a 'low context' team member's frustrations with a colleague who seems unable to get to the point and 'tell it like it is' " while 'high context' team members adhere to a more indirect, implicit style and address to the shared knowledge and experience [13, p. 1-2].
Secondly, social processes in multicultural teams are more problematic. Due to differences in values, norms of behaviour and communication style there is a higher tendency towards irritations, misunderstandings and conflicts among members. Conversely individuals are more appealed to work and cooperate with those who have similar values, beliefs and attitudes. A distraction from social processing may increase conflicts and reduce social integration among team members, that affects performance.
Lastly, conflicts can arise from team's inability to perceive the reality and the situation in the same way. It is supposed that team members coming from varying cultures, arelikely to have different perceptions of the same business situation, the same group task, or target on the account of different personal values and attitudes rooted in their cultural background.
Low cohesiveness
Multicultural teams have the benefit to produce a greater range of perspectives and problem solving approaches. Despite this advantage diverse teams lack cohesion or attraction of members for the group [5, p. 588]. Teams with higher cohesiveness have a friendly team climate, maintenance of membership due to commitment to the team, loyalty and member participation in team activities. However research findings suggest that cohesiveness does not necessarily lead to higher team performance. But low cohesiveness weakens team performance due to members less commitment. Nevertheless diverse teams can develop a strong cohesion in order to have favorable conditions to enhance outcome. According to a research cultural diverse groups should focus rather on task cohesion than on social cohesion. Task cohesion can be created through the right mixture of team members, distribution of meaningful tasks as well as clear and engaging missions [5, p. 591]. All in all we believe that a strong team culture including shared expectations and values leads to higher performances.
Benefit performance
In multicultural teams individuals bring values, knowledge and perspectives that promotes group performance [11, p. 3]. In the following paragraph we will discuss how firms benefit of such an input and enhance team outcome.
Boost innovativeness
According to Cox and Blake cultural heterogeneous teams promote creativity which is believed to be especially important in highly innovative organization and industries [2, p. 50-52]. Benefits of cultural diversity stem from a pool of ideas, multiple points of view, different backgrounds and experiences [7, p. 50-52]. However cultural heterogeneous teams are not an essential input to enhance performances that shall create radical, incremental or process innovation. The creation of innovation in products systems or processes depends rather on individuals or teams abilities than on diverse values or perspectives. However innovations or activities that are closer to the market-place require a multicultural team to boost results. Therefore researchers have found that the more values or attitudes associated with cultures differ the more creativity will be enhanced [11, p. 5]. These strengthen even further the argument that cultural diversity enhances team performance.
Prevent Groupthink
The phenomenon of groupthink can be observed when members of a group fail to express their doubts because of the desire to maintain consensus or conformity. The tendency of groupthink is most common in homogeneous groups, where members enjoy great partnerships and feel more comfortable with each other. Participants in homogeneous teams have a weaker tendency to disagree and are more likely to offer solutions excluding discussions and disharmony. Therefore a low diversity leads to one-sided ideas or solutions. Cultural diverse teams can destroy group-think. Team members bring new perspectives, new views and values. Further they are more likely to focus on the available information and to bring in completely new thoughts or concepts [10, p. 37-38]. For this reason cultural diversity is a suitable tool to break groupthink and enhance team performance.
Factors determining performances
For multinationals it is not questionable whether to form a cultural heterogeneous team. In the following paragraphs we will discuss under which circumstances cultural diversity hinder and encourage high team performances.
1. Goal orientation.
In the following we argue team composition in culture diverse groups can boost team performances depending on individuals goal orientation. It has been proved goal oriented individuals are more motivated to pursue informational benefits of cultural diversity. Hereby we focus on two follow approaches and we distinguish two types of goal orientation:
1. Learning approach - it concerns the motivation of working in a culturally diverse team, where challenges are viewed as opportunities.
2. Performance avoidance orientation - Members of diversified teams should focus rather on reaching the goal than on differences in their per-
formance. Members with a low performance avoidance orientation are less inclined to social categorization and don't tend to rely on social stereotypes.
"Cultural diversity is more positively related to team performance for teams with members higher in learning approach orientation" [8, p. 786].
0.8 -
0.6 -
0.4
0.2
Team Performance
-0,2 -0.4 -0.6 -O.B
— — — Low learning approach -High learning approach
Figure 1. Interaction of cultural diversity and performance orientation on team performance
According Van Knippenberg& Van Dierendonck (2013) the above-mentioned graph shows the performance related to the Dutch Business School human resource work group simulation. It is possible to state that people with high learning approach can reach high performance, because the challenges represented by cultural differences increase their motivation. Thus a manager involved in international relationship with his company should hire workers with high learning approach in order to improve the firm performance. Furthermore, this in-depth understanding other cultures motivates team members to scout new perspectives and accept diverse points of view. In sum, members with high learning approach are very open-minded.
"Cultural diversity is more positively related to team performance for teams with members lower in performance avoidance orientation".
The graph is based on the previously mentioned research [8, p. 786]. It shows that group members with low performance avoidance orientation are able to achieve better performances than members with high avoidance orientation. Low performance avoidance lead members to increase task effort and also increase the exploitation of different perspectives. Furthermore, group members with those mentioned characteristics are more likely to avoid stereotypes and inter-group bi-
as. Therefore members with low performance avoidance rely less on superficial information-processing such as categorization-based heuristics. Thus members with a lower performance avoidance orientation are more competitive and achieve higher performances over others.
0,8 -|
0.6 -
0.4
0.2
Team Q
Performance
-0.2 -0.4 -0.6 -0.8
— — — Low pecfonnance avoidance - High peifosnHiice avoidance
Figure 2. Interaction of cultural diversity and performance avoidance orientation on team performance
2. Heterogeneity level.
As has been mentioned, the right cultural mixture determines performances. Furthermore researchers found that teams achieve higher outcome if they share a unified culture. This happens due to encouraging internal communication, coordination as well as cohesiveness and lastly team performance [3, p. 28]. Moreover newly formed homogeneous groups can achieve high performances in short-term due to their similarities [13, p. 591].
Cultural homogeneous teams benefit from shared worldviews, common values and perceptions. This leads to a decrease of emotional conflicts, higher satisfaction and cooperation between team members. Hence shortly after team formation they develop a strong culture allowing to meet performance goals. In contrast, moderate heterogeneous teams are based on a small number of differences. The increase of diversity results in processes of social comparison and categorization. Therefore there may emerge biases that create barriers to social intercourse. The presence of multiple subcultures creates more relationship conflicts. Besides linguistic diversity and the weak group identification create conflicts among members. As a result, the team divides into pre-existing subgroups instead of forming a unitary identity. Accordingly, a moderate level of heterogeneity hinders performances and can even result in dysfunctional teams.
Lastly, high diversity will be here referred as groups where individuals differ from others on salient traits. In this case there are very few common bases for
subgroup formation and self-categorization. Hence members have to develop and establish a new shared understanding of a team member status, processes, methods of communication. In contrary to homogeneous and moderate heterogeneous teams, highly diverse teams have very few commonalities and as a cose-quence they cannot fall back on a subgroup's identity. However in order to achieve performances highly heterogeneous teams must first form a strong team culture [3, p. 28]. Hence in newly formed teams a cultural diverse configuration of group members have a negative influence on team performance. The reason is that individuals require sufficient time and opportunity to form a common basis of exchange and interaction [3, p. 29]. Individuals coming from different nations and cultural groups have more difficulties in reaching a consensus, which lowers the task performance. However over time group processes in highly heterogeneous teams achieve higher performances than at the beginning of formation. This can be explained by development of a unified culture, better interaction and communicate between team members. Even though heterogeneous groups face more difficulties, they strongly outperform homogeneous groups. Higher performances are achieved due to different perspectives that stimulate fruitful discussions [13, p. 591].
0 0.1 0.2 0.3 0.4 0,5
Racial Diversity in Management
Figure 3. Interaction effects of racial diversity in management and innovativeness
Based on our previous findings we strengthen our argument that cultural homogeneity and high cultural heterogeneity lead to high team performances. However, moderate cultural homogeneity can undermine team performances. In the following graph "Interaction effects of racial diversity in management and innovativeness" [1, p. 262] we can observe the correlation between levels of culturalracial heterogeneity in management and productivity. Based on this correlation innovative-ness will be used as a moderator that shall indicate productivity. Besides the data set
is divided between high-innovation companies and low-innovation companies. In organizations highly oriented towards innovation a moderate level of cultural diversity has a negative effect on team performance. At the same time, a highly cultural diverse team shows a positive trend for highly innovative firms.
In firms with highly innovative strategic attitudes in low and high heterogeneity are associated with higher productivity than with moderate heterogeneity. Accordingly, companies with low innovativeness don't require cultural diverse teams [1, p. 255-266].
3. Diversity management and additional costs.
Diversity management is a suitable tool to pursue social responsibility goals since it improves the image and reputation of the corporation. This has a double effect: on the one hand the good image of the company increases its value in the financial markets; on the other hand it attracts more skilled workers. According to Cox and Blake (1991) "the best companies for women and black people" face a higher demand for workplaces, diversity management is a good publicity to hire women and people from minorities or from different cultures [2, p. 48-49].
Diversity management implies additional costs for the organizations. The main financial difficulties are related to the fact that minorities and women statistically show:
- Higher turnover ratio;
- Higher absenteeism;
- Lower job satisfaction [2, p. 46].
The investment correlated with diversity management can be not appealing for those enterprises that do not rely on high-skilled labour force, and for those that do not invest in innovation. In fact diversity needs to be managed well to be effective. This implies that organizations have to create the proper structures to deal with diversity, they have to train their work-group members. All these devices involve costs. Lorbiecki and Jack (2000) recognize that there are several steps to face from monocultures to multicultural identities. Among them the most common activities such as the senior management involvement, the regular revisitation of diversity goals, and the constant advertising of diversity efforts.
Basset-Jones (2005) believes that diversity among workforce can be difficult to achieve also for those enterprises that seek high-skilled labour. In fact, corporations that need high skilled labour, prefer to have a low turnover ratio. Since minorities and women tend to show higher turnover ratios, such organizations may prefer the conflict-reducing homogeneity.
Lorbiecki and Jack (2000) pointed out a very serious problem about diversity management: seminars, training videos, interventions that should serve as diversity-training instruments have actually failed in several cases. They raised conflicts and resentment among the "normal employees", and frustration for the "diverse ones" that expected that diversity initiatives would be delivered more equality. Instead of lowering the costs of diversity, these experiences increased them.
Especially during the Nineties, when diversity management became more popular, there occurred many cases in which diversity training procured more problems and costs than benefits. Newspaper articles can prove it, for example Lubove (1997) cited some cases where companies were brought to court for racial discrimination that arose during diversity training [6, p. 122-127]. For this reason, companies had to bear double costs, those to have diversity training, and those due to the judicial troubles. The main cause of these diversity management mistakes was due to the birth of many diversity training consulting agencies, which indeed had no proper knowledge about the topic. Lubove (1997) pointed out that there is a lack of quality control in terms of diversity consultants [6, p. 127].
Overmyer-Day (1995) reported the same problems as Lubove (1997), companies have no basis to assess diversity consultants, and this can lead to more damages than benefits [9, p. 24].
Conclusion
Cultural diversity may be a suitable tool to enhance team performance. The reason is that team members coming from diverse cultures bring new perspectives, views and values. Moreover it is appropriate way to break groupthink. Those benefits can enhance creativity and hence team outcome.
At the same time performance will be boosted only under certain conditions. The main factor is to create a cultural diverse team comprising people with the appropriate characteristics. It is important that team members are characterized with a high learning approach, which makes individuals more motivated to face challenges that occur through cultural differences. Another characteristic of team members is low performance avoidance. They tend to put more efforts into their tasks and for this reason they are more motivated to benefit from different perspectives.
Both low and high levels of heterogeneity lead to high performance. Whereas moderate heterogeneity is not recommended as it hinders out come due to processes of social comparison and categorization.
In the beginning stage of formation, cultural diverse teams accomplish lower performances due to difficulties in process, but over time these difficulties dissipate. Therefore heterogeneous teams even outperform homogeneous groups in performance due to their diverse perspectives and creativity. However heterogeneous teams might be for organization that seek high performance on a short-term not recommendable.
Cohesiveness is important in team works and it is directly correlated with homogeneity. However in highly cohesive groups there is a high tendency towards groupthink. In multicultural teams the probability of group think is significantly declining due to diverse backgrounds.
It is essential for effective managing diversity, but diversity management implies additional costs. First of they connected to the higher turnover ratio, the higher absenteeism, and the low job satisfaction, which is statistically showed by minorities. Moreover, training diversity also raises costs, and in some cases it
raises conflicts and resentment. Instead of lowering the costs of diversity, these experiences increased them, in some cases companies were even brought to court for racial discrimination, and had to bear double costs, those to have diversity training, and those due to the judicial troubles. That's why organizations have to be careful when they decide to contact a diversity training-consulting agency, because there is a lack of quality control in terms of diversity consultants.
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