In mid-November, Brian was asked by a national conference organiser to present a paper dealing with managing cultural diversity in clients and customers. It soon became apparent to him that many employers have never turned their minds to this issue, but that there are great business reasons as to why they should do so.

The estimated number of foreign-owned businesses in Australia was 7,864 at the end of the 2000-01 financial year (approximately 1% of all businesses in Australia). They employed 783,300 workers (12% of all employees in Australia), contributed $12,566m to gross fixed capital formation (25% of all gross fixed capital formation in Australia) and contributed $78,056m to value added (21% of total value added in Australia).[1] Given the age of the data, the impact of foreign owned businesses will only have increased since that time.

Indeed, according to DFAT’s website:

In 2013, 85 per cent ($317 billion) of Australia’s capital flow was sourced from domestic savings while 15 per cent ($55.6 billion) was sourced from overseas (ABS catalogue 5204.0, 2013). Without foreign investment Australia would be unable to build our economy to its full potential and would have less funds available to spend on hospitals, schools, roads and other government services.

There are a number of elements within the business case for managing cultural diversity. These include:

  • Compliance management
  • Organisational development
  • Market factors
  • Government relations
  • People Management
  • Knowledge management
  • Product & Service Development
  • Customer service systems

Recognising and addressing potential cultural issues early on

The key issues here are wanting to recognise cultural issues and then wanting to address them, both inside their offices and then in their client / customer bases.

  • There are three interrelated organising elements:
  • Recognising culture and developing respect
  • Interacting and empathising with others
  • Reflecting on intercultural experiences and taking responsibility

The diagram below sets out these elements.



Organising elements for Intercultural understanding[2]

To understand any other culture, the observer must have an awareness of his/her own cultural identity and those of others. These range from easily observed characteristics such as group memberships, traditions, customs and ways of doing things, to less readily observed characteristics such as values, attitudes, obligations, roles, religious beliefs and ways of thinking.

Getting the “house in order”

However, before clients / customers’ cultural issues can be managed, the employer must have first dealt with those matters inside their business. This is why having in place a Code of Conduct, setting out the employer’s values, an appropriate new employee selection criteria, and comprehensive EEO, Anti-Discrimination, Anti-Sexual Harassment, Anti-Bullying and Anti-Workplace Harassment Policies and Procedures are so important and why they need to be backed up by training and re-training, commencing from the day of induction.

Thinking about cultural diversity in your client base

“Managing Cultural Diversity” [3] poses the following key questions regarding cultural diversity:

  1. Which aspects of workforce and customer cultural diversity need to be taken into account when planning and delivering services?
  2. Which aspects of workforce and customer cultural diversity affect planning services, assigning tasks,delivering and monitoring services?
  3. How much does workforce or customer diversity impact on the performance of managers and teams?
  4. Are there any misunderstandings or communication problems due to cultural and language differencesamong employees or customers?
  5. Have we identified the perceptions, problems and concerns which employees have about culturaldiversity?
  6. Do we have a workplace climate in which people feel free to voice concerns about cultural diversityissues?
  7. Do we have an organisational culture which values and rewards diverse perspectives and styles?
  8. What skills and attributes do managers and team leaders need to work with and to manage cultural diversity effectively?
  9. At what stage of diversity management development is our enterprise?

What is next?

Next month, Brian will cover

  • Developing a broader knowledge base, strengthening communication skills and
  • Dealing with culturally based issues

In the meantime, if you need any of the policies or procedures noted above, please let us know.

[1] 5494.0 – Economic Activity of Foreign Owned Businesses in Australia, 2000-01, 2000-01

[2] Australian Curriculum on Cultural Understanding.

[3] 2010 Australian Multicultural Foundation & Robert Bean Consulting, page 32.