Article

Multiculturalism and Human Resource Management Practices

PCTE Journal Of business Management 01/2011;

ABSTRACT The globalization of business, increased mobility of labor across geographic borders is leading to multiculturalism among several countries. For instance, in countries such as Canada, US, UK, India, and Australia, multiculturalism is increasingly becoming an integral part of the national identity. In addition, cross-border mergers and acquisitions (eg. Arcelor-Mittal) and deployment of teams for certain projects, require organizations to draw from a pool of human resources from different countries.
The globalization of the business environment that is being driven by technological and economic factors is resulting in an ever-increasing number of cross-cultural interactions in the workplace. Recent estimates indicate that there are over 1000,000 firms with international operations, and they have annual revenues in excess of $3500 billion. Not surprisingly, the growth in the number of firms with international operations has been accompanied by an increase in the cultural diversity of their employees. Much of our personal and interpersonal interactions are guided by cultural values, expectations, and attitudes. Some values transcend cultural boundaries and are mutually reinforcing. Other cultural values create interactions with high potential for conflict, misunderstanding, poor performance, and ultimately, individual and organizational ineffectiveness or failure.
The multiculturalism in Indian firms may lead to substantial benefits, including increased creativity, improved decision making, and broader markets for products. However, more cultural diversity also may pose important challenges for these firms, whether or not they have multinational operations. For instance, as cultural diversity increases, firms may need to develop new strategies for managing and motivating their employees. Other cultural values create interactions with high potential for conflict, misunderstanding, poor performance, and ultimately, individual and organizational ineffectiveness or failure. Such problems are influencing HR practices in many organizations.
This paper aims to handle some of the issues pertaining to human resource practices with respect to multiculturalism that contribute towards the efficiency and effectiveness of organizations and the performance and well-being of their members.

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