Cultural Diversity is a source of international competitive advantage.

Cultural diversity is a great opportunity to bring new ideas, creative input and innovative thinking in an organisation. Many companies believe that a diverse workforce helps to create a competitive advantage.

Because of globalisation many people are confronted with a high diversity of cultures, languages, religions, characters or peculiarities. Therefore, most of our societies and organisations have to be multicultural with the familiar or strange aspects. Concerning cultural diversity many companies make use of the so called diversity management which is the ability and the expertise to steer the diversities as well as the similarities in an effective and successful way.

But it is also obvious that cultural diversity brings along disadvantages. When moving to another country in order to work there it often starts with total confusion. People become members of a foreign culture including new beliefs, ideas and values and they often notice that their expectations do not coincide with reality. Also organisations which decide to set up a subsidiary in another country have to take such things into consideration. This phenomenon is labelled cultural shock and it often lasts for a long time. There are many companies where it is obvious that employees from other countries and cultures suffer from isolation, anxiety, helplessness and performance deficit, for example if a German manager has to go to Africa for a special business project. (Marx, 1999) Therefore, these organisations have to ensure a high qualified training in order to develop or to maintain a competitive advantage.

In general, many companies try to avoid cultural clashes between employees by developing an own culture known as the corporate or organisational culture. The strength of the organisation's culture is one of the most fundamental competitive advantages. Values, rules and expectations of the organisation are used by all company members and are given from one generation to another.

(http://www.quintcareers.com/jobseeker_glossary.html: accessed on 30.11.2005) The company Procter&Gamble for example believes that: “A fully engaged and leveraged diverse work force is a competitive advantage. Our goal is to grow that competitive edge by fostering an inclusive culture.”

(http://www.pg.com/company/who_we_are/diversity/global/index.jhtm: accessed on 30.11.2005) The employees of the company represent a rich mix of the world's population. Corporate culture affects the lives of many people to a greater or lesser degree. In Japan for example it is really strong, whereas in other countries like Spain a so called family culture is more important. (Lewis, 1999)

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However, a culturally diverse company is often viewed in a negative sense, rather than the positive. However it is easy to identify the inherent obstacles and barriers associated with differences in religion, class, age, region of origin or educational level. The first step of getting the most out of diversity is to make a concerted effort

to become aware of what levels of cultural diversity exist within an organisation. Recognising and acknowledging that there are differences between individuals and groups of people from other cultural backgrounds is an important initial step. Therefore all employees have to be able and considerate enough to talk about cultural differences. (http://ohioline.osu.edu/bc-fact/0014.html: accessed on 03.12.2005)

Diversity in an organisation grows. Thus, the complexity of communication and the necessity to start developing better communication skills has to be taken into consideration. Communication can be very difficult if there is a big difference between the two cultures. If employees or companies do not use the same communication styles or do not communicate at the same level it will have negative impacts on managing people, negotiations, meetings, contracts or advertising campaigns. (Lecture, Business Management and Cultural Diversity, Davies, S., UWIC 2005) Venturing into different cultures without preparation can be a drastic experience with deep impacts on the relationship of the companies doing business together. “You can buy in any language, but if you want to sell, you better speak the language of your customer.” A good example is the company Chevrolet. The cars called Chevy Novas were shipped to Spanish-speaking countries and Chevrolet was shocked that these cars were not selling. The reason for the poor sales was that in Spanish, “No va” means “It does not go.” (http://www.yankoloba.com/ articles. html: accessed on 05.12.2005)

It can also be explained by using the models of the cultural iceberg, the onion or the bonsai tree. (Gibson, 2002) If the company does not inform itself about such things it will not be possible to create a competitive advantage.

The pressure of globalisation is also an important aspect which influences the building up of a competitive advantage with regard to cultural diversity. Companies like McDonald’s which wanted to standardise its products, cannot sell their regular product range in India, as cows are sacred. (Lecture, International Business Management, Breverton, T., UWIC, 2005) Therefore it has to adapt the products to the local taste and of course to the culture.

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In general, the idea that all people from different cultures can be combined to one business culture (melting pot, global village) is nearly impossible because culture is deep in our routes so that it is aimless to change it and to take on a new one. (Gibson, 2002)

As we move into a globalised business environment and as new business opportunities open up, it is sometimes difficult to understand, adapt and to measure different cultures, their attitudes, values, beliefs or skills. Because of globalisation companies have to think about expanding. If an organisation decides to extend their activities from the domestic market to international markets it has to take into consideration that there are different modes in order to be able to enter the host market and that it has to develop international strategies. In every country there are seeds of cultural conflict. Misunderstandings between people from other countries can have profound consequences and they can decide on success or failure of the company. Therefore, international managers should know that transcultural competence can only be achieved by being aware of cultural differences, respecting them and ultimately reconciling them. (Trompenaars and Hampden-Turner, 1997)

People rarely think that cultural diversity also benefits organisations. It helps to create a multicultural work environment and to erase old prejudices or stereotypes. Increasing cultural diversity in the workforce poses one of the most challenging human resource and organisational issues of our time. Human Resource Management is a means of gaining competitive advantage through one of a company's most important assets; its people. (Richard, 2000) The purpose is to create an environment that provides the opportunity to the employees to manage the organisational aims and objectives.

All people have their own cultural skills and knowledge. Therefore the company is able to deal in a more effective way at local, national and international markets. Furthermore cultural diversity creates more creativity which means that the employees of the company can act out their talents with less emphasis on conformity. A more diverse workforce also produces better business results which lead to an increase in turnover and performance.

One prime example is the company Hewlett Packard which operates in many countries. At Hewlett Packard, people believe that diversity and inclusion are key drivers of creativity, innovation and invention. Throughout the world, the company puts its differences to work to connect everyone to the power of technology in the marketplace, workplace and community. “Creating a diverse, inclusive environment has been an ongoing journey of

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