Diversity of Nationality in an organization: advantages and disadvantages

2. Introduction
Literature Review
Advantages
Disadvantages
Result
Conclusion
TABLE OF CONTENTS

3. The business scenario post the spread of the concept of globalization has changed
dramatically, so have the composition of organizations. The organizations have been
searching talent and ideal team for efficient performance in an extremely uncertain
business environment with ever rising competition. In this process, business groups
have crossed the geographical boundaries.
More and more firms are recruiting people with diverse nationalities, especially in
top level management. Moreover, maintaining diversity is evolving as a managerial
activity.
INTRODUCTION

4. There has been numerous studies and researches arguing for and against the
presence of diversity of nationalities in an organisation. Various techniques had
been used to gauge the impact of bringing diversity in workforce (on the basis
of nationality) According to Alexander A. Erolin (2016), in case of multinational
entities, the diversity becomes inherent and natural due to the legal necessities of
various countries regarding local employment.
Analysing the way arguments and researches go, it becomes more clear that the
organizations with diversified workforce perform more efficiently than in case of
homogeneous workforce.
Many of the available literature quotes the importance of diversity of nationality
in board of directors (Rodrigues, 2014), and its necessity in case of MNCs
(Erolin, 2016)
LITERATURE
REVIEW

5. •Pooling up of diverse talent and skills, which is a result of diverse workforce. This
gradually brings in efficiency as the employees get to learn more from each other.
•Develops skills and positive competition among employees as a result of inclusion
of competitive personnel from various nationalities.
•Develops team spirit and morale within organisation.
•Enables an efficient functioning in different countries
•Gets faster acceptance in a region
•Inclusion of people of diverse nationality in workforce help organization gain a
positive image in society
•Further, diversity of nationalities in an organization is likely to bring innovation
into organization
ADVANTAGES

6. While diversity does have numerous advantages, it comes with numerous
disadvantages as well.
•There may be biases in working, moral support and promotions on the basis of
nationalities.
•There are situations when this gives way to unhealthy competition in
workspace.
•Similarly, it may cause ethical issues and conflicts in the organization, resulting
form the presumptions and beliefs regarding various nationalities.
•Sometimes, diversity in nationality in workplace results in conflicts of interests
in particular matters. A move/decision in organization that is favourable for
employees belonging to some countries may turn out to be unfavourable for
others.
•More often than not, there use to be some form of communication issues.
•Of course, maintaining diverse workforce is an expensive process
DISADVANTAGES

7. When diversity in nationalities was incorporated in the top level management
groups, the efficiency of firm is found becoming better than when the board was
homogeneous (Rodrigues, 2014).
However, there were also instances, when a higher level of diversity resulted in
conflicts in opinions of the board. Some studies emphasise on the fact that
belonging to same nationality brings a feeling of closeness in people, resulting in
a kind of alienation of others.
In a survey conducted on hundred Dutch companies, it was found that some 40
per cent of the workforce was non-Dutch in nationality (Diepen, 2015). The
research suggested a positive relation between diversity and performance.
Also, researches show a positive slope in the number of organisations recruiting
people from diverse nationalities over last decade.
RESULTS

8. Analysing different studies, it becomes evident that the incorporation of diversity of
nationality in workforce hold a considerably positive effect on the performance of
an organization, owing to diversity of thought, talent and capabilities.
However, for getting the most out of such a situation, an organization would have to
overcome certain hurdles or shortcomings resulting from such a diversity, such as
functional biases, conflicts in interest and opinion, the costs incurred in training,
and communication troubles .
CONCLUSION