A multicultural workforce is reflected through talent diversity. Businesses with a more multicultural workforce are becoming more prevalent across our intertwined global economy. In their relentless pursuit of increased economic returns, these organizations seek to create additional value for customers, expand into existing and new markets, and develop collaborations regardless of the business model.
An understanding of why diversity matters could help organizations devise strategies and tactics that drive business performance with the help of a culturally diverse workforce—especially in project-oriented organizations.
Diversity and Business Performance
Organizational behavior theories supported by statistically significant analyses indicate that ethnic and cultural diversity in senior-level management correlates with positive economic returns. A McKinsey study on the benefits of diversity using U.S. and U.K. data sets revealed that the likelihood of having above-national median profitability is about 35% higher for companies that have high levels of racial and ethnic diversity in their senior management teams.
More importantly, the study notes that in the United States there seems to be a direct linear correlation between such diversity and the financial earnings, such that a 10% increase in diversity indicates a 0.8% rise in earnings before interest and taxes.
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