The study seeks to investigate cultural diversity of Nestle in China to learn the extent that Nestle is implementing this strategy, the cultural diversity problems and issues that the company is experiencing, and the solutions and alternatives available to address these problems and issues. The study should support the importance of cultural diversity in enhancing competitive strength of business firms as well as provide best practices on integrating cultural diversity in global business operations.
Cultural diversity pertains to individual differences emanating from varying traits and experiences (Hampden-Turner & Trompenaars 1998, p. 8). As such, this has a multi-faceted expression including gender, age, ethnicity, disability, and even sexual orientation. Differences influence individual perceptions, attitudes and behavior. In the business setting, diversity means the existence of different opinions on issues and suggestions on the fitting solution to these problems.
Diversity cannot be declared outright as good or bad because differences involve advantages and disadvantages to all business organizations. An encompassing advantage includes the richness and variety of knowledge, skills, experiences and other competencies that enhances the quality of output of the business firm through creative inputs and innovations. A disadvantage could be the time and monetary cost involved in settling conflicts in opinion especially
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(Hampden-Turner & Trompenaars 1998, p. 190) Diversity can become a source of business strength. International companies engaging in a multicultural market can diversify its workforce in order to gain the knowledge and skills necessary to understand the various needs of a culturally diverse market. (Moran 2006, p. 15) Global companies such as Nestle operating in China, with a market having distinct cultural characteristics and experiences, can position the company and achieve competitive advantage by diversifying its workforce in China.
To strategize on diversification activities businesses rely on best practices derived from the organizational learning achieved by business firms applying various diversification strategies in actual business contexts. However, based on available literature, there are no studies focusing on the actual experiences of business firms with diversification in actual business settings, particularly diversity in the food and beverage industry in China.
On this note, the study seeks to fill this knowledge gap by investigating in-depth the concept of cultural diversity and corporate culture as well as the manner that these apply to the management, leadership and strategies of global businesses. Then this study will apply this concept to Nestle with respect to its recognition and integration of cultural diversity in its corporate culture as well as the application of this aspect of corporate culture in its operations in China.
This was selected as the locale for the study because this market has a distinct cultural characteristic from Nestle, a Swiss based firm operating in China. The study should derive insights and best practices on the value of applying cultural diversity by global businesses. To determine the effect of cultural diversity to business operations, the study will investigate Nestle’s presence in the Chinese market, whether or not it has been successful in entering this market and what can be done to improve the diversification of its workforce to meet the culture-based specific needs and demands of this market.
To derive data, the study will survey the workforce, managers and employees, of Nestle in China to determine the extent of cultural diversity of its business unit in China. After which, the extent of diversity will be considered in the context of the business objectives of Nestle in its China operation and the extent that it has achieved these objectives by including cultural diversity as a management strategy. Problems or issues faced by Nestle in China will be identified together with the implications and recommendations.
Results of the study should contribute to existing knowledge by testing the applicability of theories on cultural diversity and corporate culture through the actual experiences of global business firms such as Nestle to derive and contribute organizational learning and best practices that could help globalizing and global business firms optimize the advantage they can derive from diversifying their workforce and cultivating a culture with high regard for the value of diversity. A. Conceptual Framework
The study finds guidance through the framework for diversity, introduced by Hofstede (2003; 2005), as comprised of individual, cultural and more universal uniqueness expressed in the figure below. This implies that understanding diversity in business organizations should involve a multi-tiered approach of looking at individual uniqueness, culture-specific traits and more universal traits distinguishing one group from another. The multi-level of analysis provides a holistic underlying perspective of differences among the members of the business organization.
An understanding of diversity provides the organization with the tool and basis of strategies that optimize all potential benefits from diversity and solutions in addressing problems emanating from the diversity of a firm’s workforce. Hofstede (2003, p. 2) describes diversity in organizations in terms of variances in individual programming, which in turn constitutes patterns of unique feelings, thinking and behaving acquired or learned throughout the individual’s lifetime. Mental programming commences during childhood, the stage when individuals are receptive to ideas and assimilation.
As the individual grows older, these patterns become established in the person’s mind. When this happens patterns that need changing requires the process of unlearning which is more complex than learning. The aggregate of an individual’s unique views, attitudes and behavior is that person’s personality, which is inherited from parents and learned through social environments. Source: Hofstede, G 2005, Cultures and Organizations: Software of the Mind, McGraw-Hill, New York, p. 4. In application to business organizations, diversity is the mix of individual personalities of the members of the organization (Cox 2001, p. 4).
Due to varying perspectives and opinions, having a mix of differing personalities allows the firm to derive multiple views of issues and problems resulting to comprehensive understanding of problems, options, and alternatives. Diversity could then be used by business firms to enhance its strengths. Diversity problems experienced by business firms are then understood and determined by looking at differences and the dynamics of these differences to find solutions to conflicts.