Factors That Influence Cultural Diversity

Factors that influence cultural diversity

In modern days' commercial environment, cultural diversity plays an important role in every corner around the globe. Many firms grow from small enterprises into large multinational enterprises in the recent few decades, during the conversion period and entry of foreign markets; these MNEs have experienced various convergences from language adoption to cyber technologies, from foreign direct investment to financial globalization, as Mead & Andrews states that globalization has changed the functions and thinking, process of the business in the international market (2009). Many factors influence the rise of multinational enterprises at the global level, the most representative factors are:

 Information and Communication technologies (ICT)

Digital technologies are the essential factor that helps the rise of multinational enterprises, which is the tool of integration and unification. In this, many marketing communication tools and technical are used by the firms for minimizing the communication differences among different countries in the global market (Andrews & Siengthai, 2009). ICT reduces the communication and transaction costs dramatically, increases the speed and efficiency while maintains the firm's core competitiveness in the aspect of information and resources. It assists the firms to enhance their criteria for doing business at global level in the successful form (Mead & Andrews, 2009).

 Marketplace

Marketplace is another key factor that influences the rise of multinational enterprises. Pursuit of profit and market share is the ultimate goal of any firm in this world, by understanding and interpreting the culture in different regions; it helps the company to adapt quicker and better in a foreign territory, promotes company original culture and business pattern fuse into the local commercial environment.

 Culture

Cultural factors have closely relation with the rise of multinational enterprises from all aspects. The firms adopts various contents from different regions and countries in the world, these contents help companies to understand and identify values, beliefs, attitudes, ideologies, patterns of behavior at a global level.

 Resource

Resources is another important factor that affects the rise of multinational enterprise, through exploiting and using global resources, multinational enterprises are able to expand their operation in the international scale with adoption of various languages. This would help the company to minimize the barrier and identify the value in the local market, in order to provide better product and service to the local customers. Hiring of resources is an important factor to avoid language barrier in the global market (Andrews & Siengthai, 2009).

Benefits and problems in cultural diversity

Under the globalization and commercial integration, multinational enterprises may obtain benefits from cultural diversity that include:

 Enhance brand influence and company image

Cultural diversity assists enterprises to understand target market better in the way of local customers and business environment. For example, Coca-Cola achieved huge success through its advertisements in different countries, each advertisement owns unique local cultural features in the target market,