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Why is Cultural Competence a crucial skill for organizations nowadays?

Updated: Feb 21

This post is a contribution from Yulia Bondar.


Every business strives for high-performing teams. Companies invest resources to raise team effectiveness and make their product or service successful. They do it through automation, better processes, using tools & technologies, etc.


However, the biggest challenge and eventual reason for f achieving these results is a phenomenon that can’t be solved by automation - and this is human interaction.


Globalization has made cross-cultural workplaces a common thing. And organizations are competing for the best talents, hiring globally. We have international colleagues and offices located all over the world, but sometimes we do not think enough about what happens when employees join the company. What does it actually mean when a workplace includes many cultural backgrounds? Forming a key part of the human mind software, the cultural background makes people approach the world differently, which leads to different styles of communication, giving and receiving feedback, building and maintaining relationships.


At the end, when robots will take over all our repetitive work, social interaction will be our focus.

Moreover, being culturally diverse, organizations and businesses get advantages in the market. These are:

  • A diverse background brings different skills - so-called “hard skills” are the most important aspect that we take into account when hiring. People that come from diverse backgrounds have their own individual set of skills that could be of use. Working on a project for a foreign company can be a lot easier if you have someone who is related or familiar with the local customs and culture.

  • Diverse cultural perspectives can inspire creativity and drive innovation

  • Local market knowledge and insight make a business more competitive and profitable - A multicultural workforce can give an organization an important edge when expanding into new markets. Often, a product or service needs to be adapted to succeed overseas. Understanding local laws, regulations, and customs, as well as the competitive landscape, can help a business to thrive.

  • A diverse working environment attracts talents - A Glassdoor survey shows that people prefer employers who show nurturing of cultural diversity among their employees. The results show that two-thirds of the people that took part in this survey find cultural diversity an important part of the job-seeking process. It means that you’ll have more chances of hiring top talents if you show that there are no prejudices or biases within your organization.

  • Diverse teams are more productive - It sounds logical that a homogeneous working environment produces a more stable team that can work together well. However, studies show that diverse teams are more productive. They produce versatile ideas, there’s a healthy competitive spirit that springs colorful ideas and approaches to various issues

With all the benefits being mentioned, there are of course challenges popping up in a cross-cultural environment. Human interaction is based on different benefits and beliefs, which come from different cultures and can lead to misunderstanding within the organization’s ecosystem. Therefore, here are areas of potential risk when working in a cross-cultural environment:


  • Employees from some cultures may be less likely to let their voices be heard

  • Integration across multicultural teams can be difficult in the face of prejudice or negative cultural stereotypes

  • Different understandings of professional etiquette - for instance, the expectation of formality (or relative informality), organizational hierarchy, and even working hours can conflict across cultures. Where a Japanese colleague may not feel it appropriate to leave work before their manager, a Swedish professional may be used to a 6-hour working day. Additionally, different approaches to punctuality, confrontation, or dealing with conflict can prove an issue.

  • Conflicting working styles across teams - working styles and attitudes towards work can be very different, reflecting cultural values. If not recognized and accounted for, conflicting approaches to work can put the brakes on productivity.

There is good news! In a global world, you can train your “cultural awareness” skills! It will be beneficial not only for building more aligned and better-performing teams but creating a more diverse but sustainable workplace, where people from different backgrounds can contribute to the commonwealth and stay authentic to themselves.

Cultural competence refers to the ability to interact effectively with people of different cultures. Cultural competence consists of four components:


  • Awareness of one's own cultural worldview;

  • Attitude towards cultural differences;

  • Knowledge of different cultural practices and worldviews, and

  • Cross-cultural skills

Developing cultural competence results in an ability to understand, communicate and effectively interact with people across cultures. This is why training your cultural competence is important practice for leaders, and is crucial if you are working in an international environment.


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