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Cultural Diversity in Organizations

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Cultural Diversity in Organizations Cultural diversity in organizations A study on the view and management on cultural diversity Authors: Dhakshayene Holmgren Anneli Jonsson Supervisor: Maj- Britt Johansson- Lindfors Student Umeå School of Business and Economics Spring semester 2013 Master thesis, two-year, 15 hp ABSTRACT Cultural diversity is a subject that has been getting growing attention not just internationally but also in Sweden in the 21st century. The globalization of economies and the migration has dramatically increased opportunities while also affecting organizations in a manner that it requires it to be more open and accommodative towards a heterogeneous working environment. Unfortunately many companies do not see the advantages that cultural diversity could bring and how a well managed cultural diversity could essentially achieve competitive edge in the market. Therefore there is little is to be found regarding how organizations today view and manage a culturally diverse workforce, especially in a Swedish working environment. The lack of this type of research in a Swedish context creates a possible research gap and leads to this study in investigating the organizations in Västerbotten and their view and management of cultural diversity. Thus the research question: How do Swedish organizations view and manage cultural diversity? In order to gain insights in to this question, previous research has been investigated and some main theories have been selected. Through this it has been found that cultural diversity is a complex subject that can bring both positive and negative effects to an organization. These are in turn affecting how cultural diversity is viewed by that organization. Furthermore, this view affects how cultural diversity is managed, and the management in turn affects the result this concept brings to the company. This in turn has been represented in a theoretical model representing the relationship between these concepts. The main theory that is used throughout the study and in analyzing the empirical data is Adler’s approaches to answer the research question. This study takes view of interpretivism and constructionism as its philosophical stance. This has led to the choice of conducting a qualitative research approach with mixed method that is a combination of both the deductive and inductive way of collecting data. The research is conducted through multiple case study design with semi structured interviews as the way of gaining empirical data. These interviews have been conducted on seven organizations within Västerbotten that represents different types of industries within this region. As it is shown in this study the cultural diversity is viewed in a positive way and managed to achieve synergy within the organizations in Västerbotten. The firms believe that in order to develop and gain competitive advantage, they need to accommodate cultural diversity and create an atmosphere that is open and flexible. Still most of the firms lack the holistic view as they fail to articulate diversity at the strategic level and consequently in all dimensions of the organization. In addition the study has also identified different influential factors of cultural diversity, such as the geographical location, organizational culture, cultural diversity leading to cultural diversity, customers’ diversity and managers’ perspectives affects the existence of cultural diversity within an organization. These findings have been presented in the developed analytical model in the conclusion. KEYWORDs: Cultural diversity, Effects of cultural diversity, views on cultural diversity, managing cultural diversity. 1 Acknowledgements First of all we would like to express our profound gratitude to our supervisor Maj- Britt Johansson- Lindfors for her guidance and flexibility in helping us in the entire process of this thesis. Her constructive advice has been very useful in achieving the objective of this thesis. Further we would like to extend our appreciation to all the participants who allocated their valuable time and effort between their busy schedules. This of course has not only helps us to reach answers to our research question but also contributed to our learning experience. Anneli Jonsson & Dhakshayene Holmgren Umeå, May 2013 2 TABLE OF CONTENTS 1. Introduction .............................................................................................................................................. 6 1.1 Background ......................................................................................................................................... 6 1.2 Identified research gap ...................................................................................................................... 8 1.3 Purpose and contributions of the study ............................................................................................ 9 1.4 Demarcations ..................................................................................................................................... 9 1.5 Structure of the thesis ..................................................................................................................... 10 2. Literature review ................................................................................................................................... 11 2.1 Cultural Diversity ............................................................................................................................ 11 2.1.1 Diversity .................................................................................................................................... 11 2.1.2 Discussion on cultural diversity ............................................................................................... 12 2.1.3 Cultural diversity in Västerbotten........................................................................................... 14 2.1.4 Cultures in organizations ......................................................................................................... 15 2.2 Managing Cultural Diversity .......................................................................................................... 17 2.2.1 A general picture of managing cultural diversity ................................................................... 17 2.2.2 Literature review on managing cultural diversity ................................................................. 19 2.2.3 Adler’s approaches to managing cultural diversity ................................................................ 22 2.2.4 Literature review summary ..................................................................................................... 25 2.2.5 Discussion on literature review................................................................................................ 26 3. Research Methodology ........................................................................................................................... 28 3.1 Theoretical Methodology ................................................................................................................. 28 3.1.1 Choice of the subject & preconceptions ................................................................................... 28 3.1.2 Philosophical stance .................................................................................................................. 29 3.1.3 Research approach .................................................................................................................... 30 3.1.4 Research design ......................................................................................................................... 31 3.2 Practical Methodology ..................................................................................................................... 33 3.2.1 Case selection ............................................................................................................................ 33 3.2.2 Data collection ........................................................................................................................... 34 3.2.3 Data analysis ............................................................................................................................. 38 3.2.4 Reliability of the thesis ............................................................................................................. 39 3.2.5 Ethical consideration ................................................................................................................ 40 4. Empirical Findings ................................................................................................................................ 42 4.1 Interview with Iksu ......................................................................................................................... 42 4.1.1 Company background and cultural diversity .......................................................................... 42 3 4.1.2 The firm’s view on cultural diversity ....................................................................................... 43 4.1.3 Effects of cultural diversity ...................................................................................................... 43 4.1.4 Managing the cultural diversity .............................................................................................. 44 4.2 Indexator .........................................................................................................................................
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