The Disadvantages of Globalization and Diversity
Globalization and diversity are correlated trends in business. Companies that have saturated the domestic market have invested in growth abroad to tap into new marketplaces. Simultaneously, domestic and global companies have experienced more diverse workforces due to a changing U.S. population and the realities of running businesses and foreign countries. Despite the advantages of a diverse employee base, globalization and diversity do pose challenges.
A goal of human resources in a global company is to create a unified work culture where employees share values. This objective is more difficult in diverse and global companies because you ask people from more varied cultural backgrounds to find common ground. In reality, companies often wind up with a culture specific to each office or location that is distinct from the culture in other offices.
Managing diversity is vital to gaining benefits of broader ideas, varying perspectives and, ultimately, better results. The distance between employees in global companies presents a problem in this effort. Companies may have marketing staff employed around the world, for instance, that must collaborate on global branding and promotional initiatives. Even with technology, this distance can pose communication issues and conflicts when you have people from diverse backgrounds trying to work together toward collective goals.
Globalization and diversity individually add to company costs; collectively, they can increase business expenses dramatically. Setting up new offices or stores, training employees in new markets, transporting goods globally or finding new supplier relationships and building up technology for global communication are among costs of global business operations. Costs to coach and train diverse employees and to offer translators for language barriers add to the expense.
Business ethics is a hot-button topic in the U.S. The Enron accounting scandal and collapse of 2001 kick-started much of the modern concern for the ethical nature of business. A challenge with a global, diversity-laden company is that different employees, countries and cultures have varying views toward ethical issues. In some countries, such as India and Brazil, for instance, under-the-table money is common when you want public officials to help your company. Global companies must decide which countries to enter and how to cope with a mixed ethical business world.