Cultural Diversity as a Success Factor? Empirical Results Based on the IAB’s Linked-Employer-Employee-Data Set

The data shows that, on the one hand, a rise in the proportion of foreign employees in an establishment can tend to have a positive effect, albeit not a statistically significant one. On the other hand, there can be an increased risk of conflict if the workforce consists of roughly equal groups of different nationalities. These conflicts can have a negative influence on the firm’s success. Moreover, it is clear from the data that the influence of cultural diversity on corporate success is linked to features specific to the organisation- such as the existence of export activity or the skills structure of the workforce. A company’s HR management should therefore be aware of the potentially opposite effects of cultural heterogeneity and address the issue accordingly as part of a coordinated system of diversity management.