Cultural Diversity and Business Performance: A Research Report

This research report investigates the impact of cultural awareness and diversity on business performance, focusing on McKinsey & Co. The study utilizes both primary and secondary data, employing quantitative research methods and SPSS software for analysis. Key findings indicate employee satisfaction with the working environment and the firm's efforts to promote cultural awareness. The report highlights both the positive aspects, such as increased employee performance, and the potential negative impacts, such as increased conflict, associated with a culturally diverse workforce. Recommendations include providing training sessions to emphasize the importance of cultural diversity in the workplace. The report covers background information, literature review, research methodologies, data analysis, research outcomes, conclusions, and recommendations, along with appendices including a questionnaire and research proposal form.

Research Project
Part – 2

Executive summary
The report is all about to develop an understanding about the cultural awareness and
its impact upon the business performance. The entire study is based upon both primary and
secondary data collection methods. For the same, quantitative research methods has been
used in which SPSS software is considered in order to generate the valid outcomes. The
findings of the study signify that employees of McKinsey & Co. are completely satisfied with
the working environment and company also develop different strategies in order to make
individuals aware pertaining to culture. Also, through both data collection methods, it can be
summarized that there is both positive and negative impact upon business by using cultural
diverse workforce because it increases the performance of employees and sometimes
increases conflicts as well. Thus, to improve the same, it is recommended to the firm to
provide training session in order to understand the importance of cultural diversity at
workplace.

Table of Contents
Executive summary....................................................................................................................2
INTRODUCTION......................................................................................................................4
Background.......................................................................................................................4
Rationale...........................................................................................................................5
LITERATURE REVIEW...........................................................................................................5
RESEARCH METHODOLOGIES............................................................................................9
DATA ANALYSIS ...................................................................................................................10
RESEARCH OUTCOMES......................................................................................................19
CONCLUSION AND RECOMMENDATIONS.....................................................................20
Conclusion......................................................................................................................20
Recommendations...........................................................................................................20
Reflection & Recommendation of alternative research methodology............................21
REFERENCES.........................................................................................................................23
Appendix..................................................................................................................................24
Questionnaire..................................................................................................................24
Research Proposal Form.................................................................................................26

INTRODUCTION
Background
In this competitive era, every company wants to stay ahead in the competition and
that is why, business requires different employees that assist to attain the define aim of a
company. In the same way, current research is also shed a light upon cultural workforce and
its importance for the business. Therefore, the cultural awareness is all about understanding
of difference between themselves from other countries or other backgrounds and this is
varying from differences in attitude and values that may leads to affect the environment.
Through this, individuals come to interact with each other and as a result, cultural awareness
is developed that helps to reduce the chance of making bad decision. The chosen firm for this
study is McKinsey and Company who provides strategy and management consulting services
i.e. acquisition, developing a plan to restructure a sales force etc. The present study will help
to examine the importance of having diverse workforce and its impact upon the organization
performance. Therefore, by using the primary and secondary research methods, scholar is
able to identify the views of selected respondents and working environment of McKinsey.
Research Aim: The aim of the study is to analyse the impact of cultural diverse workforce on
organisational performance. A study on McKinsey & Company”
Research Objectives:
 To understand cultural diversity concept at workplace.
 To identify impact of cultural diverse workforce on organisational performance.
 To identify challenges faced through McKinsey & Company while managing the
culturally diverse workforce.
 To identify various ways McKinsey & Company used for managing the culturally
diverse workforce.
Research questions:
 What do you mean by the cultural diversity in context to organisation?
 In which manner cultural diverse workforce effect on the performance level of a
company?
 What are different issues arising from managing diverse workforce?
 For manage culturally diverse workforce, what effective strategies firm needs to use?

Rationale
The reason for choosing this topic is such that having a diverse workforce will lead a
business towards a further level of success and that is why, it is essential for the company to
recruit cultural diverse workforce. In this competitive era, companies are looking to stay
ahead and for that, diverse employees are required that assist to share their views and take a
business at further level of success. But there are many companies who do not focused upon
this and that is why, it is considered as an issue for business. Also, this in turn recognized as a
research issue because now a day’s companies are focused to hire diverse range of employees
because they share their views and assist a business to increase their financial performance as
well. That is why, by using SPSS software, research helps to understand the meaning of
cultural diversity and its importance for the business effectiveness.
LITERATURE REVIEW
Theme 1 Cultural diversity at the workplace
As per Roberson, (2019)cultural diversity refers to underlying values directing the
people how they behave. The cultural diversity refers to the traditions, values or beliefs on
the basis of age, race, ethnicity, gender or religion. Economic globalisation could be stated as
major driving forces for the cultural diversity in workplace. Cultural diversity could be
referred as characteristic of group that are focused over demographic differences that
distinguish the one from other in a group. Modern workplaces are made of people with
different background. Employers realize that workforce diversity is essential as it provides
the intangible and material benefits. The employers for reaping benefits of the cultural
diversity in organisation have to communicate the value and objectives for addressing
challenges of the diversified workforce.
It is also considered that organisation having workforce with different background
have enhanced contribution for resolving the conflicts. Organisation having diversified
workforce gain advantage of understanding the different culture and beliefs that can help
them in gaining market acceptance by delivering products and services understanding their
culture and beliefs. Managers play an important role in resolving the issues related to cultural
diversity by providing them collaborative work environment. Company must celebrate the
different cultures that helps them in knowing the employees and building healthy relationship
between employees. Organisation can have diversified views and perspectives from the
employees from different cultures. It develops environment of teamwork and collaboration
that may lead to organisational success. The cultural diversity enables the organisation to

view the problems from different angles that helps in generating more innovative and
effective results and outcomes.
Theme 2: Impact of cultural diverse workforce on the organisational performance
As per Chavan, (2017)the workplace diversity means division of workforce in distinct
categories which have perceived commonality within given national or cultural context. The
diversified workforce of the organisation influences the performance of employees which
have direct impact over organisational performance. Cultural diversity has both positive and
negative impact over the performance of business.
In the view Cletus and et.al., (2018) of positive impact of cultural diversity includes
rich flow of diversified and innovative and creative ideas of doing things or solving the
problems. The improved process of doing work increases the performance of the
organisation. Company having multinational existence can understand the culture of different
countries and can frame more effective may help to win the new markets and markets could
be targeted for specific products. strategies understanding their values and beliefs. Having
diversified workforce Company with diversified workforce can develop environment of
teamwork and coordination for achieving the common goals and objectives. It develops
environment that accepts change and undertake new challenges that helps in improving
organisational performance. The positive values could be adopted for enhancing the
processes and work which will improve the organisational performance.
On the other cultural diversity can negatively impact the performance id not managed
properly. It is essential that the managers are highly effective and able to create environment
of trust else there will be conflicts and issues affecting performance. There are organisations
where majority group may not accept the employees from other culture and do not provides
them same opportunities, this directly impacts the efficiency of employees. It is hard to
handle people from different cultures as they may follow their personal beliefs over the
organisational objectives. There may be also communication barriers that can lead to
misunderstanding of the tasks. It will reduce the organisational efficiency.
As per Joubert, (2017) Contingency theory for cultural diversity provides that success
of the business and diversity management is based over attitude of the firm in different areas
for instance the organisation and cultural strategies, work environment and performance of
employees. It requires the business to manage diversified workforce for organisational
success.
Goal setting theory provides that organisation that have clear goals and objective are
motivated and delivers better performance as compared with those who are not having clear

goals and objectives. It leads to the complexities which affect the performance of the
organisation therefore leaders must establish clear goals and objectives to be achieved by the
workforce. This enables to work for achieving common objective collectively. Employees
indulge in unproductive activities when they do not have defined direction to be followed for
achieving the goals.
This is reflected that with the help of effective diverse range of people, company is
able to improve its financial performance. On the other hand, it is also examined that having
diverse workforce, company may also increase the conflicts and this in turn somehow leads
to creates personal graded between employees that affect the performance level as well. That
is why, cultural diversity not only helps to creates positive impact but it also causes opposite
impact upon the organizational performance. Therefore, it company must develop an
effective way to minimize the same otherwise cause wrong impact upon business
performance as well. Apart from this Gopalkrishnan (2018) explain in their study that due to
opposite environment company’s productivity as well as performance level affected. In the
same way, if company has a diverse range of people, then it leads to innovation and solve the
problem up to some level so that company’s performance enhances and this in turn sustain
the brand image of a firm as well.
Theme 3: Challenges faced through McKinsey & Company while managing the culturally
diverse workforce
According to Gottardello, (2019) every organisation that has diversified workforce
has to different challenges related to management of the culturally diversified workforce.
These challenges have to be managed effectively for achieving the organisational goals and
objectives.
The major challenge faced by the McKinsey is to establish respect between the
employees or employers which is main value contributing in the successful business. It is
essential that organisation respects people belonging to every cultures and this environment
should flow from the executives. The disrespect for cultures will lead to conflicts between the
workforce and affects the employee performance. Respect for each other will lead to
exchange of clear ideas and thoughts that will help them to provide new solutions and
methods of doing work to the organisation.
As per the view of Dobbin and Kalev (2018) another challenge that company faces is
the physical and the mental disability as the workers with the disability are not provided with

the appropriate accommodation which poses as the challenge in promoting cultural diversity.
Along with that, there are organizations which fails to provide the service dogs with the other
requirements. Another major issue is in respect to the communication gap among the
employees and the employers which results into effective communication and thus,
consequently lead to difficulties in understanding the information and communicating the
same to the team members. In case, the information is not completely understood then this
results into team and workplace conflicts. Apart from this, ethical and cultural difference also
exists in the workplace and thus, employees sometimes also stereotype based upon the
ethnically, culturally and other cultural backgrounds and such kind of bias and discrimination
is not tackled in any of the organization and therefore, it becomes imperative for the
businesses to effectively and efficiently understand and take account of such differences
otherwise it leads to affecting the reputation of the organization.
Theme 4: Various ways McKinsey & Company can use for managing the culturally diverse
workforce
According to Hunt and et.al., (2018) it is important for the business organization to
find ways in order to implement and promote cultural diversity in the workplace. There are
certain strategies or the ways which is being implemented by McKinsey & Company for the
purpose of effectively managing the cultural diversity in the workplace. First is the gaining an
understanding about the cultural difference within the organization which involves getting an
understanding about the time, hierarchy and the mode of contract and so forth. Author further
stated that by the way of determining the existing cultural differences in the organization will
help the human resource department of the company in making strategies in respect to
educating the people pertaining to the cultural diversity along with the problems which is
being faced by the management. This helps in formulating strategies which results into
reducing the cultural barriers in the workplace.
Second is creating a platform of open communication which helps in reducing the
workplace conflicts which arises due to the lack of effective communication. As per the view
of Korzilius, Bücker and Beerlage (2017) the local people make use of the different modes of
communication with the varying style which leads to disruption in the effective
communication system and poses as a challenge. McKinsey & Company can implement open
communication system through which it can effectively understand the view point of the team
members in a better way and also generates a bonding by one on one interaction periodically.
This is considered to be an effective way in managing cultural diversity in the organization.

The next approach is the introduction of the free speech in which the employees can state
about their opinion freely in regard to the agreement or disagreement in respect to the
particular topic or the working environment. This can be made possible by providing mentors
to the new employees with whom they can share their opinion.
RESEARCH METHODOLOGIES
Research methods: It is a prominent strategy which is useful in gathering specific set
of data to find valid answers to the research questions. It is sorted into two varied
methodologies which are qualitative and quantitative. Qualitative methods analyse the non-
numerical set of data which is highly significant in understanding key opinions and concepts
(Kumar, 2019). The investigator of the project has selected quantitative method because it
helps in attaining descriptive analytical information which helps in determining the impact
related with the cultural diverse workplace upon the performance of organization.
Research philosophy: It is associated with the key development and nature linked
with the knowledge. It is sorted into two varied philosophies which are interpretivism and
positivism. Interpretivism philosophy is prominent in effectively interpreting key elements
linked with the study. It is shaped by social context and human experience. Positivism
method adheres with the facts and figures which has been gained with the help of
observation. The investigator of the project has selected positivism philosophy which helps in
developing key linkage on impact of cultural diverse workforce and organizational
performance.
Research approach: This is a planned procedure which consist of specific
assumptions to address the research problem. It is sorted into two varied approach which are
inductive and deductive. The investigator of the project has selected deductive approach
because it develops hypothesis and test within the process of research.
Research design: It is a specific strategy which is useful in integrating varied set of
components in a logical manner (Taherdoost, 2016). It is sorted into two varied design which
are exploratory and descriptive. The investigator of the project has selected exploratory
method which is useful in investigating on the specific research problem because it has no
relevant set of past records or information. It is useful for the proper discovering of existing
knowledge and other set of unfamiliar concepts.
Research strategy: This method helps the researcher in addressing the key relevant
objectives of the research project. Appropriate set of questionnaire has been framed where the

quantitative set of information has been collected to manage culturally diverse workforce
with appropriate strategies.
Data collection: This is a prominent procedure which measures and effectively
collect data on the key set variables to answer stated set of research questions and also
evaluate the outcomes. It is sorted into two varied sources of collecting data which are
primary and secondary. Moreover, the secondary source is the data which has already been
collected and has been further used for the purpose of investigation (Kumar, 2019). The
investigator of the project has selected primary source of collecting data. Here, the first-hand
information has been gathered by developing a questionnaire.
Sampling: It is useful for the appropriate selection of the sample who has desired set
of features and characteristics from the large set of population. It is sorted into two varied
sampling method which are probabilistic and non- probabilistic. Probabilistic method
generally looks to provide all the respondent an equal chance to get selected in the sample
size (Wang and et.al., 2019). At the same time non probabilistic do not provide an equal
chance for the respondent to get selected in the sample size of the company. In regard to the
current study simple random sampling method has been used to find out the sample size of
the company in long run. The investigator of the project has selected random sampling
method where 50 respondents has been chosen.
Data Analysis: Data collected with the help of data collection tool need to be
analyzed and present in a way that it used to give clear image to the reader of the same. For
the same reason thematic data analysis tool will be used in the research. Under the same data
analysis tool variety of different themes will be made and different outcome will be presented
with the help of the table and graphs in the report in general.
DATA ANALYSIS
Descriptiv
e Statistics

Are you
familiar
with the
concept of
cultural
diversity
Are you
satisfied
with the
working
environm
ent of the
company?
Do you
think that
cultural
diverse
workforce
creates
direct
impact
upon
organizati
onal
performan
ce?
Does your
organizati
on
prioritize
inclusion
of cultural
diversity
among
employee
s?
Does the
firm
provide
training
program
to
promote
the
diversity
and
inclusion?
What are
the
challenge
s
company
faces
while
managing
cultural
diversity?
Which one
of the
following
strategy is
used by
McKinsey
to manage
culturally
diverse
workforce
?
Mean 1.2400 2.3200 1.2600 1.3000 2.4000 3.0000 3.0400
Median 1.0000 2.0000 1.0000 1.0000 2.0000 4.0000 4.0000
Mode 1.00 2.00 1.00 1.00 2.00 4.00 4.00
Std.
Deviation .43142 1.01900 .44309 .46291 1.08797 1.21218 1.17734
Interpretation: From the above statistical analysis it has been interpreted that average
respondents are aware with the concept of cultural diversity and 50% of the sample size are
satisfied with the working environment of the company. Moreover, the table also depicts that
majority of the respondent favours that cultural diverse workforce creates direct impact upon
organizational performance. On the others side, it is also analysed that McKinsey develop
different strategy in order to keep aware their employees with regards to inclusion and
diversity. From the overall assessment, it is clearly reflected that average number of
respondents are highly satisfied that company have diverse workforce that will leads a
business towards a success direction.
Theme 1: Concept of cultural diversity

Frequency Percent
Yes 38 76.0
No 12 24.0
Total 50 100.0
Interpretation: After going through the variety of different data which was collected with
the help of primary data collection tool, it was clearly understood that there is good sort of
understanding about the cultural diversity in the organization. Collected data shows that out
of the pool of 50 participants, 38 participant has gone with the option of yes in the survey and
only 12 participant has gone with the option of no. Hence, it is very good sign for the
company as if any decision will be taken in regard to maintaining cultural diversity all the
employee will understand the importance of same and will support the management as well.
Theme 2: Respondents are satisfied with the working environment