Research Paper: Globalization

Pages: 7 (2263 words)  ·  Bibliography Sources: 1+  ·  Level: Doctorate  ·  Topic: Business  ·  Buy This Paper


[. . .] Among various environmental factors, challenges, and threats, economic forces have the leading impact on an organization's operations, culture, and overall performance in the industry.

Economic forces refer to the earning and spending patterns of the individuals, business entities, and governmental bodies in an economy according to the changing market conditions and environmental impacts. These forces mainly constitute inflationary pressures, industry growth, level of unemployment, exchange rate fluctuations, interest rates, purchasing power parity of general consumers, costs of labors, material, and technology, etc. These forces can either turn in favor or against the business operations of the organization -- thus, making its profit rise or shrink accordingly (Weinstein, 2005).

5. Cultural Diversity

Globalization allows firms to compete at the international level. Now organizations can not only sell their products to international customers, but are also able to set up their business operations outside their home countries. In addition to the international expansion opportunities, Globalization also brings a number of issues and challenges for these organizations. Cultural diversity is one of the most critical challenges which impact the organizational culture, industrial relations, and day-to-day operational activities of organizations at a large scale (Parry, 2013). When a business organization sets up its operations in an international market, it has to recruit new individuals to meet the increased human resource requirements of the international business operations. These individuals are generally hired from the local market (target country) in order to save extra expatriation costs and Foreign Service allowances. However, large multinational organizations hire their workforce from parent country, target country, and third countries. These parent country nationals (PCNs), home country nationals (HCNs), and third country nationals (TCNs) collectively form a diverse workforce. Being citizens of different regions, these individuals differ from each other with respect to cultural values, race, ethnicity, color, religious beliefs, and norms (Markovic?, 2012).

Negative Impacts of Cultural Diversity on Organizational Culture

Among all these five critical factors, cultural diversity brings the most significant negative impact on the organizational culture. Reason being, the management of a culturally dispersed and diverse workforce becomes a big challenge for the managers to handle at the workplace when an organization breaks its local boundaries and enters into an international market for the very first time. The biggest challenge which cultural diversity brings is the communication barriers among individuals from different nations. Managers have to ensure that every individual is able to communicate his ideas and share work related information with his coworkers in an effective and efficient way. If they fail, employees may not be able to perform efficiently which results in poor organizational productivity (Parry, 2013).

Secondly, it becomes harder for managers to build a strong organizational culture in the presence of a culturally diverse workforce. Employees from different cultures and nationalities have different social values, religious beliefs, and life preferences which make it difficult for them to accept the values, beliefs, and preferences of their coworkers from other nations and regions. In this way, a culturally diverse workforce has greater chances of conflict at the workplace which negatively impacts the organizational culture and productivity (Seymen, 2006).

Moreover, managers face difficulties when they have to arrange training and skills development programs for their employees. Having work experience from different markets of the world, culturally diverse individuals have different training requirements. Therefore, managers have to assess these requirements and make extra efforts to train these individuals for better performance at the workplace (Markovic?, 2012).


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Seymen, O.A. (2006). The Cultural Diversity Phenomenon in Organizations and different… [END OF PREVIEW]

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Cite This Research Paper:

APA Format

Globalization.  (2013, June 26).  Retrieved July 17, 2019, from

MLA Format

"Globalization."  26 June 2013.  Web.  17 July 2019. <>.

Chicago Format

"Globalization."  June 26, 2013.  Accessed July 17, 2019.