The last two decades have witnessed an increasing number of multinational companies expanding their business ventures across the world. The explosion of these firms into the global market has facilitated by globalization, removal of trade barriers and advancement of technology (Siriphattrasophon, 2016). Consequently, the companies face challenges ranging from legal, cultural, political, and environmental during their operations, access to the market, and employment (Siriphattrasophon, 2016). Since human resource is an integral part of the business operation at all levels, cross-cultural differences are inevitable, and hence there is an inherent need for effective cross-cultural management of human resources.
Effective cross-cultural management is a growing challenge facing the majority of multinational companies. Many countries are implementing equity policy and policies of diversification to ensure equal access to employment opportunities (Ruzagiriza, 2017). The demand for cross-cultural management in organizations has increased substantially from globalization, global division of labor, equal opportunity for all, and offshore outsourcing. Therefore, firms have been forced to implement effective cross-cultural management strategies that promote business performance, employees’ cohesion and access to employment opportunities for the minority groups (Ruzagiriza, 2017). Consequently, it is increasingly necessary for managers to understand cross-cultural management and be able to adopt effective strategies that ensure a harmonious relationship within a collective group.
There are three aspects of cultural diversity, namely internal, external and organizational dimensions. The intrinsic level exists within a person and includes age, race, sexual orientation and ethnicity (Ruzagiriza, 2017) Organization dimension refers to the individuals’ functions within the organization and professional affiliation, and it contributes to the organizational culture. Lastly external to religion, experience, education and personal habits. However, leadership is a primary determinate of management of cultural diversity, hence need for the establishment of transformative leadership to nurture cultural diversity and inclusion, and formation of organization culture.
According to Ruzagiriza (2017), cross-cultural management is how an organization manages people from different cultural backgrounds, whose aim is to design operational framework and management strategies across diverse cultural history. Additionally, culture is defined as strong sets of perceptions and principles, that when expressed can juxtapose those from other cultures (Sultan et al., 2013). There are three levels of cultures within a business environment namely national culture, organizational culture and business culture (Siriphattrasophon, 2016). National culture is the dominant culture within the boundaries of a country while business culture is the values that govern acceptable business operations in a society. Organizational refers to core objectives, mission, and internal adjustments that are achieved through collective mobilization and harmony among employees within an organization. Therefore, effective leadership is critical in attaining cultural diversity, hence need to integration policy that promotes equality, equal opportunities for all, and eliminates discrimination. For it to be efficient, leadership must streamline programs and objectives of the company to achieve the intended business goals.
Competent leadership is fundamental in establishing an organizational culture that promotes diversity, social interaction and giving a business a competitive advantage. However, failure of cross-cultural management occurs from, insufficient cross-cultural awareness, inadequate understanding among managers, an inadequate willingness among managers, and insufficient levels of competencies and skills among managers. The failures are caused by a manager who is unaware of presence cultural dimension in management, managers who know the presence of cultural aspect but undervalues its impact, and also managers lacking intercultural competence (Siriphattrasophon, 2016).
Therefore, culturally conducive business environment helps the organization to access the market, determine what product to sell, and also helps organizations to come up with effective dispute resolution strategies. To achieve this, companies such as coca cola combine a different degree of cultural adaptation, stages of development and cultural integration to overcome challenges that may arise from cultural diversity. Therefore, cross-cultural management performed through creating cultural synergies, conducive environment for cultural learning, skills development training, and employees’ recognition. For effective cultural management system, there should be acceptance of the existence of cultural diversity, development of consciousness of cultural diversity management for the leaders, and becoming aware of the differences.
Cultural Diversity at the Coca Cola Company
Multinational companies, for instance, Adidas, Nike, Petro-Canada, Coca-Cola and Microsoft Company have acknowledged the positive impact of cultural diversity in achieving the competitive advantage of their enterprises. Culture plays a crucial role in influencing the choice of market, deciding what products to offer, and affects access to markets. Therefore, effective management of cultural diversity is essential in promoting organizational decision-making process, improving representativeness and also stimulates creativity among employees.
Equally, the Coca-Cola Company, a multinational company, is one of the few international firms that have prioritized cross-cultural management in their operations (Coca Cola Company, 2018). The institution has adopted an inclusive policy supported by seven core values, namely collaboration, diversity, passion, quality, leadership, and accountability. Equally, the business workplace strategy attracts, develops and retains diverse talents, provides support for groups with different expertise, and incorporates programs to educate all employees to be culturally sensitive(Coca Cola Company, 2018). Notably, the programs have made the company achieve sustainable growth, fair work environment, and inclusivity. Furthermore, the firm has the company has adopted strategies that have enabled it to streamline its operation within the local culture. For instance, in China, the company has implemented the “Think local, Act local” model, incorporated Chinese religions in the advertisements.
Integrating business programs to conform to the local culture enhances access to the market and drives business goals. Its global leadership facilitates the application of the training program, with good insight and understanding of cultural management (Coca Cola Company, 2018). Furthermore, in its strategic plan, Coca-Cola has established a diversity advisory council and business resource group that aims to ensure effective management of diversity in culture and business prospects. The diversity advisory council is an example of a cultural competence committee, and it is made up of representatives from legal experts, policymakers, and employees (CocaCola Company, 2018). The advisory council is responsible for establishing a culturally sensitive workplace to ensure employees cohesion.
Furthermore, the council is mandated to develop policies and regulations that ensure cultural competency is an integral part of the company’s cultural ethics and organizations culture. The firm has gained a competitive advantage; image and marketing that has helped increase its productivity. Furthermore, the company has adopted programs such as Zero-tolerance for display of cultural insensitivity, establishing cultural competence committee, cultural diversity training, and cultural training for expatriate employees, and global leadership within the workplace.
Diversity training is one of the primary strategies adopted by Coca-Cola Company in managing cultural diversity at the workplace (Manisha, 2018). Diversity training is a training initiative taken by the management of a company or organization to create awareness of diversity and inclusivity in workplaces. There are two categories of diversity training, Awareness-based training, and Skill-based training. The latter deals with proficiency in tackling cultural difference in the organization and uses tools that help employees in interpreting cross-cultural differences, adaptability and intercultural communication (Manisha, 2018). Awareness-based training is used for sensitizing the employees and making them aware of their cultural assumptions and prejudice. The delivery of the program is through experiential exercises and case-studies (Manisha, 2018). Equally, the firm has adopted diversity training programs that drive employee’s engagements and create a work environment that values diversity and accelerates productivity.
To ensure successful implementation of the training initiative, the firm has incorporated the effort into its inclusion and diversity strategic plan, which is coordinated by the Diversity Advisory Council. The training initiative is anchored on three pillars, namely Diversity training, Diversity Library and Diversity speaker series (CocaCola Company, 2018). The programs aim at minimizing conflicts and strengthen the company’s ability to reinforce its values and respects for sustainable business growth (Chen, 2017). Thirdly, the company has employed an experienced manager to help in formulating and driving the organization diversity policy, and that includes diversity training program (CocaCola Company, 2018). Furthermore, since the top leadership has to be involved in the training to make it successful, global leadership is a critical asset that has ensured the training is effectively cascaded down to the junior employees, thereby providing continuity of the program.
Diversity training has enormous value to an organization like Coca-Cola. First, it creates an inclusive environment that encourages teamwork and harmony among the employees. Secondly, the initiative helps the firm to establish a competent team that is composed of people from different background, experience, and culture that improve business performance (Chen, 2017). Lastly, the training program creates a conducive environment which promotes behavior shit, encourages innovativeness, and supports positive organizational culture.
Chen, W. (2017). Research on Cross – cultural Management in Transnational Management of Enterprises. Proceedings of the 2017 International Conference on Innovations in Economic Management and Social Science (IEMSS 2017). doi:10.2991/iemss-17.2017.281
CocaCola Company (2018) Diversity Education & Training. Retrieved March 17, 2019, from https://www.coca-colacompany.com/our-company/diversity/diversity-education-training
Manisha Srikanth. (2018). What is Diversity Training? and Why It’s Important. Retrieved from https://www.infoprolearning.com/blog/what-is-diversity-training-and-why-it-is-important
Ruzagiriza, A. U. (2017). Does Cross-Culture Human Resource Management Affect Performance of International Organizations? Evidence from Rwanda. International Journal of Innovation and Economic Development, 2(6), 14-28.
Siriphattrasophon, S., & Trang, N. T. (2016). Cross-Cultural Management of a Multinational Enterprise: A Case Study of Thailand and Vietnam.