Case

The Impact Of Cultural Diversity On the Profitability Of A Business

Sandrine Simone Fifatin

Dallas Baptist University

The Impact Of Cultural Diversity On The Profitability Of A Business

I- Introduction

Diversity is a term, which is commonly used to stress the differences in some major aspects of life such as national origin, ethnicity, religion, race, gender, age and many others. Consequently, cultural diversity refers to the discrepancies in the cultures of different people. Jonathan Steele (2010) in “Speechmastery-definition of cultural diversity,” defines cultural diversities as “the various different social structures, belief systems, and strategies the cultures use for adapting to life situations in various parts of the world.”

Cultural diversity is a very important phenomenon to analyze today because it is gradually becoming ever-present. The main reason for that is the consistent disappearance of international borders due to globalization. People from the Middle-East travel to America and people from Europe go settle down in Africa.

As a matter of fact, there exist several “Chinatowns” in major cities such as Chicago or London. Chinatowns are districts within larger cities, which host significant Southeast Asian populations. This is a clear depiction of how world cultures intermingle today.

We believe that cultural diversity has a beneficial impact on the profitability of businesses and this case study aims at analyzing the reasons for this thesis.

II- Cultural diversity within the business setting

It is undoubtedly irrefutable that the biggest reason for international migration is related to employment. People leave the shores of their countries in search for “greener pastures”, that is places where their skills and knowledge will be better remunerated. It is estimated that the total world supply of labor migrants in 2005 exceeded 182 million people (Business Map of India, 2011). Based on this fact, it is obvious that cultural diversity is...