Managing Cultural Diversity in Small and Medium-sized Organizations

The EU member states are facing difficult demographic changes. Their societies are ageing. The average age of the European population will increase from approximately 40 to 50 years over the next four decades. Life expectancy has been increasing in an almost continuous and uniform trend at the rate of 2-3 months every year. In many EU countries the domestic population is also shrinking. On the other hand, the first decade of the 21st century has seen large waves of immigration into the EU. Every year, about 1.7 million people immigrate into the EU.

Because of immigration, organizations become increasingly more diverse in terms of the national and cultural backgrounds of their employees. Immigrants are often different from what is considered “normal” in the receiving society. They often bring with them different rules of conduct, values, mind sets, and normative orientations. This diversity can hamper collaboration in the workplace and integration into the host society in general. In response to an increasingly diverse workforce, many European companies and public institutions have initiated so-called diversity management programs. However, despite increased research on diversity management in the recent past, disagreement over what diversity management entails is restraining the development of a coherent body of knowledge. Much of the work is speculative and findings of empirical studies about diversity management are still fragmented and inconsistent. Research on cultural diversity in small and medium-sized enterprises (SMEs) is scarce, even though SMEs may be more affected by demographic changes than large companies.

Our research project focuses on the management of cultural diversity in SMEs and pays special attention to professionally qualified immigrants from Non-EU countries. Our goal is to better understand the use and effectiveness of measures designed to integrate immigrant professionals into their organizations. Our findings will enable us to provide evidence-based recommendations to decision makers for managing a culturally diverse workforce and for improving the integration of qualified immigrants especially from non-EU countries.

After reviewing the research and practitioner literature on diversity management, we conducted semi-structured expert interviews in four different countries: Austria, Germany, Italy and Spain. Next, we conducted focus groups with immigrants from non-EU countries. Some sample topics discussed in the focus groups and interviews include the challenges of working in a foreign country, support by the organization, coping strategies by individuals, and suggestions for improving the integration of immigrants. In a final step, we conducted an online survey about integration issues from an organizational as well as from an individual perspective.

In the organizational level questionnaire, we measured the degree to which SMEs apply principles of cultural diversity management such as top management support, cultural diversity climate, alignment to the external environment as well as alignment with the organization’s strategy. A main part of the questionnaire assessed the utilization and effectiveness of specific cultural diversity management practices. Additional questions dealt with reasons for implementing cultural diversity management, its difficulties and outcomes. The questions in the individual level questionnaire tapped into the perception of diversity management practices by immigrants and will enable us to compare the perspectives of the organizations employing immigrants with the perceptions of the immigrants. In addition, we measured a variety of individual outcomes which may be affected by an organization’s diversity management practices such as job satisfaction, adjustment, and organizational commitment.

We are currently analyzing the data from this research project and are preparing academic papers as well as guidelines for practitioners on how to manage cultural diversity in small and medium-sized organizations.

Website of the project: www.eudim.eu

Presentations at conferences and seminars

  • 1st International Conference on Self-Initiated Expatriation, Toulouse Business School, May 28-29, 2015 ”Managing Cultural Diversity in Small and Medium-Sized Enterprises: Implications for Self-Initiated Expatriates from Non-EU Countries and Their Employers“
  • Symposium on Diversity Management in European SMEs, May 13, 2015. EU Liaison Office of the German Research Organizations, Brussels.

Cooperation partners

  • BF/M Bayreuth Research Institute for Small and Medium sized Organizations at the University of Bayreuth: Prof. Dr. Torsten M. Kühlmann, Ramona Heinz, Martin Rochi
  • efms (European forum for migration studies at the University of Bamberg): Luisa Seiler
  • GES in Barcelona, Spain (Gabinet d‘Estudis Socials, SCCL): Joaquim Aiguabella, Paolo Leotti
  • IIB (Institute for International Business at Vienna University of Economics and Business:  Prof. Dr. Günter Stahl, Doris Friedrich
  • Lunaria, Rome:  Grazia Naletto, Giovanni Alteri
  • Cooperation Partner: GGS German Graduate School of Management and Law

Funding

  • European Union, represented by the European Commission, Directorate-General Home Affairs, Directorate B – Migration, Asylum.